A third of SME leaders concerned that they will be out of business within 12 months, reveals survey

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5th November 2020 14:51 - Business Support

A third of SME leaders concerned that they will be out of business within 12 months: A survey of SME leaders has found that just over a third (35%) believe they will struggle to continue running their business beyond 12 months, due to the impact of Covid-19.

The research by law firm, Fladgate, polled 500 SME leaders - finding that amongst medium- sized businesses, the percentage was even higher, at 43%.

The Restart Capital Survey found that almost a third (31%) of respondents are still in a 'shock and denial phase' about the impact Covid-19 has had on their business, or are feeling 'anger and depression', while a fifth believe their business to be in 'distress'.

Almost three-quarters (73%) said they are trying to raise funds to help them get through the turbulent times, however 46% who have been trying to continue admitted they have not been as successful as they had hoped.

Investors

The research also polled 100 investors, with findings revealing that many are open to supporting SMEs through the difficult waters ahead - and nine out of 10 (90%) saying they believe SMEs are 'key' to the wider economy in the UK.

More than 8 out of 10 investors (85%) said they would like to play an active role in any investments they make, with half revealing they have experience of working with firms facing difficulties.

More than a third (37%) said they were interested in distressed companies, while 35% said they are interested in businesses that consider themselves to be growing.

Of all the sectors, construction was seen as the most attractive to investors, with almost three in 10 participants in support (29%). This was followed by manufacturing (28%) and wholesale and retail trade (28%).

Fladgate came up with 16 ideas of how the government could help ease the current flow of funds for businesses, which were put to respondents.

It found that the most popular was an EIS type tax incentive (favoured by 81% of investors and 73% of SMEs), while a CBILs-style sharing of borrowing risk was also a preference, liked by 82% of investors and 67% of SMEs.



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