- Almost half (49%) of mid-sized businesses say they will struggle to continue trading if the strictest restrictions continue for a further two months
- Medium-sized companies across the UK have taken on an average of £8m in extra debt as a result of Covid-19
- Nearly half (45%) are unsure if they will be able to pay additional debt back under current funding arrangements
New data released today shows how lockdown is taking its toll on medium-sized businesses, with nearly half (49%) 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, 82% 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 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 mid-tier companies have borrowed an average of £8 million per business as a direct result of the pandemic, with almost half (45%) unsure that they will be able to pay back their loans under the current funding arrangements. Almost a third (31%) believe the Government should extend repayment terms on Covid-19 loans.
Ed Dwan, partner and Head of BDO in the North West, said:
“We know we are likely to see the toughest lockdown restrictions stay in place for some time yet and while the Government has had to walk an incredibly difficult tightrope between protecting the UK’s businesses and shielding our health services throughout the course of this pandemic, it is critical that in the upcoming Budget we see policies that help support mid-market businesses.
“History tells us that the rate of recovery of this market segment will play an important role in the overall economic recovery of the UK. For most, the already rapid roll-out of the vaccine cannot come soon enough.”
However, if restrictions are loosened ahead of spring, medium-sized businesses feel much more optimistic about their longer-term prospects. BDO’s research found that 87% believe that they will be able to increase trade and return to pre-Covid-19 revenues within three years. Similarly, in recognition of the efforts the Chancellor has made already to protect firms, 87% are confident the Government will provide enough support to businesses over the next 12 months.
Note to editors
Bimonthly survey of 500 medium-sized businesses. Medium sized businesses are defined as businesses with revenue between £50-£350m. The survey was conducted by Censuswide on behalf of BDO in January 2021.
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Tom James / Francesca Bliss
Headland Consultancy on behalf of BDO LLP
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