The coronavirus crisis will cost the UK’s small and medium sized businesses an average of around £12,000, according to a survey which shows that two fifths of such firms are at risk of closing permanently.
A poll of 3,700 small and medium-sized enterprises (SMEs) by business insurer Simply Business showed that firms reckon the cost of lost work and earnings will come to £11,800.
On the basis that there are around 5.8m SMEs in the UK, the total cost to small and medium-sized businesses of coronavirus could come to more than £60bn.
The survey found that two-fifths of businesses fear they could have to permanently close because of the pandemic, which has severely disrupted supply chains and caused demand to evaporate.
It also found that four per cent of SMEs have already stopped trading permanently. The figure is likely to mean that hundreds of thousands of small firms have ceased operating.
On a more promising note, the survey found that 75 per cent of SMEs believe they will begin trading again soon. One in 10 are confident they will start a new business.
It comes as the government plans to reopen some schools from the start of next month and non-essential retailers such as clothes shops from the middle of June.
The reopening is expected to boost the economy. Yet many firms have said they could struggle to break even as customer numbers are limited by social distancing.
The Treasury is also preparing changes to the job retention scheme, which is paying around 8m workers’ wages as companies struggle amid the virus.
“Financial support has been vital in keeping small businesses going,” said Alan Thomas, UK chief executive at Simply Business.
“No business has been able to escape the impact of the pandemic – and that’s no different for small businesses and the self-employed.
“Yet they are the lifeblood of the economy, and with many of these at risk of permanent closure, so much is at stake for our local communities and wider economy.”