Multiple lockdowns and changes in consumer habits have had a negative impact on cash flow for most small and medium-sized businesses in the UK.
This is according to a new report from lending platform CapitalBox, which surveyed 250 UK SMEs and found that more than two-thirds (68 percent) have suffered. For a quarter of those that reported troubles with their cash flow, the impact has been “very negative”.
Cash flow problems forced organizations to postpone reinvestment into the business, making surviving economic turbulence an even more challenging task.
To make it through, SMEs were forced to make some drastic moves, including pausing or cancelling future projects, reducing staff hours and pay, cutting office perks and reducing office space. Most of them (56 percent) took out loans to pay for overhead and wages.
Hospitality and leisure sectors had it worst, followed by utilities, agriculture, marketing, and construction.
The good news is that the majority of those that applied for government help (55 percent) were granted it. A third received tax relief, and almost half took out government loans.
“I am pleased to see that the majority of small and medium businesses across Europe feel that they have been sufficiently supported by their governments during one of the hardest times we have had to face,” said Scott Donnelly, CEO of CapitalBox.
“Governments must make sure though that they have access to immediate cash to avoid a gap that could damage their business – whether that is through loan schemes or working with alternative lenders outside of the retail space, is essential. SMEs are confident in the year to come, and so am I.”