Nearly one fifth of UK small and medium-sized enterprises (SMEs) believe that they will be unable to survive a second lockdown, according to a new report.
Small business insurer Simply Business revealed in a survey of more than 500 SME owners across the UK that 17% of SMEs think they will be forced to close their doors for good as the economy shuts down for the second time.
It also found that a third (32%) of SME owners felt they would be impacted worse than the first lockdown but would survive, while a further 34% felt a second lockdown would have the same impact as the first.
Just 5% of those surveyed believed they would cope better than the first.
In terms of business recovery, 24% of firms thought it would take between a year to 18 months to recoup the money lost during COVID-19.
One in five (19%) thought it would take between 6 to 12 months and one in 10 (12%) thought 18 months to 2 years. A further 12% believed it could take a staggering 2 to 3 years to recover.
The survey also looked into employee numbers, which found that some 68% of businesses questioned expected their staff numbers to remain the same. However, one in five did expect it to decrease, adding to the risk of rising unemployment levels across SMEs.
The majority of SME owners admitted to feeling less confident about the long term prospects of their business.
Alan Thomas, UK CEO at Simply Business, said that Britain’s second lockdown “could prove fatal for SMEs”
“Few have been financially harder hit than SMEs, small businesses, and the self-employed, and it’s telling that many have been living in fear of another lockdown and the consequences it would have on their business,” he said.
“The government has a clear duty to protect public health throughout the pandemic, but it’s obvious that any decisions – whether that’s on fiscal policy, this second lockdown, or packages of financial support – is going to have a huge impact on the rate of recovery for small businesses, and ultimately, the UK economy.
“SMEs account for 99% of all UK businesses and contribute a combined £2tn ($2.6tn) annually. Put simply, we need small businesses to bounce back if we’re to recover economically."
England entered a one-month lockdown on Thursday this week, which will last until 2 December as the government aims to prevent a second wave of coronavirus infections. Last week the number of COVID-19 cases in the UK passed 1,000,000.
Non-essential shops and hospitality have closed, and travel is now under new restrictions. Schools and colleges, however, have been allowed to stay open.
Watch: Why can't governments just print more money?