A poll of small businesses spread across the country has provided insight into how SMEs are feeling about the future in light of the COVID-19 recession, with many respondents revealing uncertainty around the security and origin of their future funding.
ScotPac’s SME Growth Index revealed that nearly one in three SMEs are considering closing or selling their business within the next six months if conditions don’t improve, with the figure skewing even higher among smaller SMEs.
While ScotPac CEO Jon Sutton noted the businesses were surveyed over four weeks in September and October, whereas November conditions are looking up, he called the results a “warning” for what may come should another lockdown occur or significant border closures remain in place.
“The research shows just how much so many within the small business sector have been hurting,” he said.
The data made clear that the smaller the business, the more severe the impact of the pandemic, with two out of every five SMEs with $1-5m annual turnover looking to sell or close by April 2021 if economic conditions were not to improve in a big way.
One in 12 small business respondents indicated they arranged non-bank funding facilities to deal with the impact of COVID shutdowns on their supply chain and revenue, with a further one in eight planning to add non-bank funding facilities once government stimulus currently in place ends.
A quarter of small businesses expect to reassess their funding provider when the stimulus does end by April 2021.
“Given more than a quarter of SME respondents were covered by the stimulus, it’s important to consider what impact its withdrawal will have between now and April 2021,” Sutton said.
“This is an issue that small business owners should take seriously. The financial aftermath of the COVID crisis is a call to action for SMEs to make the hard decisions about their business – how viable it is, what happens when ATO debts are enforced and other debts fall due, how to deal with the end of JobKeeper, and the best way to fund the business.”
