- 10% of SMEs would have been at risk of closure had the furlough scheme ended in April
- Nearly a third of SMEs agree their business would not have survived without the scheme
Following the Government’s announcement that the UK Job Retention Scheme is to be extended to the end of September, new research has revealed that more than one in 10 (12%) SMEs would have been at risk of closure had the scheme ended in April.
The survey*, which was commissioned by Hitachi Capital Invoice Finance, spoke to more than 1,000 senior business decision makers at SMEs across the UK from a range of different industries about how the end of the furlough scheme would have impacted their business.
On top of a tenth admitting they would be at risk of closure, 14% of business decision makers agreed they would have needed to make redundancies had the scheme not been extended, with workers in the hospitality and leisure (30%) and manufacturing (22%) industries being most at risk.
When looking at the industries most at risk of closure, hospitality and leisure were again at the top of the list, with more than a quarter (28%) admitting they could have closed down without additional furlough support.
Industries with highest risk of SME closures when furlough support ends:
- Hospitality and leisure - 28%
- Manufacturing - 16%
- IT & telecoms - 13%
- Media & marketing - 11%
- Construction - 10%
The research by Hitachi Capital Invoice Finance also examined the impact of the pandemic without key aspects of government support, and found almost a third (30%) of SMEs agreed that their business would not have survived without the Job Retention Scheme. This figure was highest among businesses in the North West (34%), East of England (34%) and West Midlands (32%).
Commenting on the research, Andy Dodd, Managing Director at Hitachi Capital Invoice Finance, said:
“With nearly 6 million SMEs operating across the UK, the government's extension of the Job Retention Scheme will be welcome news to hundreds of thousands of businesses across the country.
“The furlough scheme has provided an essential lifeline for so many businesses, especially to those industries most affected by the crisis. Our research highlights just how important it has been for SMEs, so it’s great that the government has decided to extend the scheme further, protecting jobs and even businesses from failing.
“Of course the furlough scheme isn’t the only government support available to SMEs during COVID and I’d urge business decision makers to analyse the full range of support available to them to ensure their business is as strong as possible.”
Find out about the full range of support available to SMEs on the Hitachi Capital website: https://www.hitachicapital.co.uk/media/4673/government-support-pdf_mar21.pdf
For SMEs struggling as a result of COVID-19, Hitachi Capital Invoice Finance offers cashflow finance solutions which can support businesses through this difficult period.
*Survey of 1,001 senior decision makers at UK SMEs. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1001 adults. Fieldwork was undertaken between 22nd - 25th February 2021. The survey was carried out online. The figures have been weighted and are representative of British business size.