New data released today shows how lockdown is taking its toll on medium-sized businesses, with 50% warning that they could cease trading in less than two months if restrictions do not ease.
If the current lockdown lasts a further three months into April, 77% say they would be at serious risk.
While the health implications of lifting lockdown restrictions too early will understandably be the primary concern of Government, the new figures published today by accountancy and business advisory firm, BDO, show that a continued shutdown could have major implications for the wider regional economy.
Medium-sized businesses across the UK generate £1.4 trillion in revenues each year and provide one in four jobs, according to BDO’s analysis, making them a critical part of any post-pandemic recovery.
BDO’s research also identified that nearly a third of businesses in the region (31%) have borrowed between £11m and £20m per business as a direct result of the pandemic, with a third unsure that they will be able to pay back their loans under the current funding arrangements.
Despite this, 57% of South West businesses feel now is the right time to invest in the future of their business even against a challenging backdrop. The priority areas for investment are funding for technology to support more people working remotely (40%) and outsourcing their finance function (37%).
Businesses in the region are looking to the Government to support by considering an extension to the furlough scheme (57%) and to relax restrictions as soon as possible (43%).
Paul Falvey, Tax Partner at BDO LLP, comments: “This data shows us clearly that while many of the region’s businesses have found new ways of working and are looking to invest in this and streamline their operations, others are within weeks of running out of funds if the current restrictions continue without additional support.
“With so many businesses having taken on high levels of debt and unsure they will be able to repay, businesses will be looking for support in the upcoming Budget and are hoping we see policies and measures that will build their long-term resilience. The rate of recovery of mid-sized businesses will play a crucial role in the region’s overall economic recovery.”