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Mon, 13 July 2020

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One in three small firms closed due to coronavirus fear they'll never reopen, new study finds

One in three small firms closed due to coronavirus fear they'll never reopen, new study finds

The warning came as Boris Johnson unveiled his plans for reopening the economy

2 min read

One in three small firms closed due to coronavirus fear they may never be able to reopen, a new study has found.

Stark new figures from the Federation of Small Businesses found four in ten small firms have already been forced to close their doors since the beginning of the coronavirus outbreak in the UK.

According to the business group, around 35% of those firms which have already shut are unsure whether they will be able to reopen, while many others are facing difficulties in affording rent or mortgage payments on their premises.

The warning comes after Boris Johnson promised he would take "baby steps" towards reopening the economy over the next six weeks as he unveiled his "roadmap" for easing lockdown restrictions.

But the Government plan will see most non-essential firms remain shut until at least the beginning of June, with others asked to stay closed until July at the earliest.

Meanwhile, the study found that while 71% of firms had taken up the Government's furlough scheme to protect jobs, more than one in three (37%) said they would consider, or already had, been forced to make redundancies.

Responding to the figures, FSB National Chairman Mike Cherry, said: "The impact of the coronavirus pandemic has been felt right across the small business community, with thousands of small firms all over the UK fearing for their futures.

"The Government has stepped-up with a huge range of support for millions of small businesses and sole traders, from income support schemes, to cash grants, to help with accessing finance and business rates breaks.

"Policymakers now need to realise that the economy will not go from zero to a hundred overnight once we’re into the recovery phase. The crucial support that’s on offer needs to be kept under review, and adapted to reflect the new normal as we chart a course back to economic recovery."

Mr Cherry also warned some small business owners were "falling through the cracks" after the study found 8% had applied for Universal Credit, but that almost a third (29%) of those claims had been rejected.

"The support measures that we've secured are helping the vast majority, but they're not helping absolutely everyone," he added.

"We're hearing from business owners who are falling through the cracks and taking their stories straight to the top of government.

"Policymakers need to be in listening mode and prepared to help the most vulnerable over the challenging months ahead. No one should be left behind."


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