Thousands of UK companies are facing a “cliff-edge scenario” but only a tiny fraction have got access to the Government help that could help them through the coronavirus crisis, a new survey suggests.
The second weekly Coronavirus Business Impact Tracker from the British Chambers of Commerce (BCC) has found that only 1% of firms had successfully received support from the Government’s Coronavirus Business Interruption Loan Scheme (CBILS), while 7% are receiving grants.
More than a third of companies are now planning to furlough the vast majority of their staff, the survey found, but more than half (57%) have less than three months’ cash in reserve and 6% of respondents have already run out of money.
The Chambers’ survey comes as a number of trade bodies have raised concerns about whether their industry will survive without state intervention.
BCC director general Dr Adam Marshall said: “Our latest data shows that many businesses face a cliff-edge scenario, either at the end of this month or over the course of the next quarter.
“We’ve seen a big jump in the number of firms furloughing staff, and many are now starting to apply for access to Government loan and grant schemes to keep themselves afloat. Yet our research suggests that support is only starting to reach firms on the ground.
“We are pleased that the Chancellor is listening and responding to our calls to strengthen the existing support. Improvements to the CBILS scheme should help more businesses get access to the cash they need over the coming days and weeks. This could be the difference between survival and insolvency for many firms.
“It’s vital that governments across the UK continue to work closely with business over the coming days. Every minute counts, and governments, local authorities and banks must do everything in their power to ensure support gets to firms on the front line more quickly.”
Figures released last week showed that councils in the North East had given out more than £125m to companies in its areas, while the Welsh Government had distributed £150m.
But many sectors of the economy are appealing for more help, with a trade association representing the haulage industry saying it may need to be nationalised unless firms are given cash to avoid going bust.
Richard Burnett, chief executive of the Road Haulage Association (RHA), said around 20,000 companies have completely stopped operating, which is around 30% of the sector.
He said: “With the potential collapse of so many businesses, we are facing the re-nationalisation of road haulage. Because without trucks, without hauliers, people do not get their stuff, they will not get their food.”
Mr Burnett described how the Government’s coronavirus business interruption loan scheme “just doesn’t work” as companies are struggling to convince banks they are a viable and going concern when they have got no work.
He said: “We’ve got haulage companies that are just going to collapse because cash flow has dried up, they’ve got no access to money, the banks won’t lend to them because the risk is too great and they can’t service the debt anyway.
“And yet we’re the industry that’s keeping the nation fed. Government need to provide grants. This shouldn’t be about loans.”
Meanwhile, around 2,800 gyms and other fitness sites could close by the middle of June unless the Government steps in with extra help, that industry’s trade body has warned.
Gyms and leisure centres are struggling to pay their rents and overhead fees, and are not collecting any money after having been forced to close by the Government in a bid to halt the spread of coronavirus.
It means that about 100,000 jobs could be lost within the next 11 weeks, Ukactive said.
“Our nation’s gyms and leisure centres form the fabric of our society, as well as contributing £7.7bn to the economy annually and employing one of the most passionate and dedicated workforces in the world,” said Ukactive chief executive Huw Edwards.
He added: “If nothing is done and we say goodbye to our gyms and leisure centres it will have a devastating impact on our society when we emerge from the coronavirus pandemic, at the precise time when these facilities will be needed desperately by people.”
Next ranked North East firm on the list was Fentimans, which was placed 25th with sales of £40.4m and growth of 29.4%.
Last year the company went through a major brand re-launch, and now sells more than 40 flavoured drinks selling in 80 different countries.
Prima Cheese – which supplies processed cheese to pizza makers and other companies from its base in Seaham – is placed 39th on the list with sales of £65.5m and growth of 23.6%.
That puts it one place higher than Team Valley-based high-end snack maker, It’s All Good, which posted sales of £27.4m and growth of 23.3%.
The list is compiled by investment group Alantra, whose partners Simon Peacock and Charles Lanceley said: “This year’s Alantra Food & Beverage Fast 50 contains a significantly higher number of businesses that have taken on private equity capital; this has given them the financial firepower to expand more quickly, as well as access to support and advice from a broader network of experienced sector experts.
“Still, it would be a mistake to underestimate the qualities and attributes that individual founders and managers bring to their businesses. Above all, what shines through the companies in this year’s Fast 50 is their leaders’ passion and enthusiasm for what they do, and it is what makes these businesses so exciting and inspiring to work with.”
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