The financial hardship created by the lockdown is “being compounded” by a lack of help from landlords, with almost a fifth (19%) of British SMEs in the hospitality space having a rent holiday declined, according to Law firm Buckworths.
The figure comes from the firm’s survey of over 500 UK SME owners and decision-makers to gauge attitudes towards the Government’s response to the coronavirus crisis and the economic impact of the ongoing lockdown.
It found that with Boris Johnson expected to announce his exit strategy in the coming days, the need for “urgent action” to save the economy from free fall is clear. Over a quarter (27%) of SMEs don’t think the Government’s support scheme is enough to help them survive the impact of COVID-19, whilst nearly 20% of owners admitted their business could not survive longer than a month without a boost to their cash flow.
Along with this only 14% of SME owners felt that their landlord was understanding of the impact of COVID-19 on their business and had granted them a rent holiday on their commercial lease.
Michael Buckworth, MD at Buckworths, said: “The UK government has largely been on the front foot during the coronavirus crisis, announcing measures, such as the job retention scheme, almost before businesses had formulated their proposal.
“However, the government now seems to be on the back foot, reacting to pressure from business and the media to end the lockdown, and repeatedly failing to outline a viable exit strategy.”
He added: “Our research clearly shows that Britain’s smaller businesses don’t have the resources to survive and re-open if lockdown continues for much longer. With so many SMEs – particularly those in the retail and hospitality sectors – already saying that they are on life support, an extension would be the equivalent of pulling the plug.
“Not only would it devastate the UK economy and create a record spike in unemployment, but it would also lead to so many business closures that a return to normal pre-COVID-19 society would no longer be a feasible option.”