The Analysis Editor’s Letter


UK businesses are owed £133bn since lockdown


Stephen Kiely Editor, CCRMagazine stephen@ccrmagazine.co.uk


UK firms are returning to work this month with some trepidation, according to research by MarketFinance. Nine in 10 businesses are waiting to be paid an average of £148,917 for work done pre-lockdown, half of those that applied for CBILS loans have been declined and cashflow will be strained as invoices take longer to be settled. It is little wonder that 85% of business owners have felt a sense of loss of control over the past three months. With £148,917 still owed to them since


March 2020, the vast majority of firms (81%) are also expecting to wait longer to be paid for the goods they provide and work they do from now on. Half anticipate waiting anywhere between 14 and 30 days beyond normal terms (45 days). Whilst 15% reported they could be waiting anywhere between three and six months longer to be paid for work. Only 43% of businesses that applied for a


CBILS loan were successful in securing it. The typical loan taken by these businesses was £211,667, though they applied for almost double this amount. Anil Stocker, CEO at MarketFinance,


said: “The reopening of the UK’s high streets marked the first buoyant moment for UK businesses in months but it might well be the calm before the storm. “Businesses are facing a three-pronged


whilst one in six (15%) expect a decrease in sales of more than 75%. Longer term, owners have revised down


their expectations of when they anticipate things to return to normal. In March, the majority (56%) felt business would normalise by September 2020. However, now the majority (57%) feel it could take as long as one to two years and are planning for this. Most businesses (45%) anticipate only


returning up to half of furloughed staff to work in July and a quarter are likely to be kept on furlough as part of the extended scheme as the economic picture and business climate plays out. The future remains less certain for the remaining quarter of furloughed staff, who could well be made redundant. Of businesses with a physical location over


Only 43% of businesses that applied for a CBILS loan were successful in securing it. The typical loan taken by these businesses was £211,667, though they applied for almost double this amount


assault on their finances. First up, its alarming that only half of their CBILS loans are being granted, then we learn that they have close to £150,000 in outstanding payments since the lockdown began and now, it is likely that they will have to wait twice as long to get paid for new work they do whilst demand and economic activity normalises. This coupled with a very moderate outlook for trading conditions, ‘rent quarter day’ this week and uncertainty about their workforce, no doubt this will put further pressure on businesses.” As the lockdown has eased and shoppers return to the high streets,


almost half (45%) of businesses are optimistic that there is pent up demand for their products and services which they are eager to serve. This said, most businesses only expect a conservative 10% increase


in sales over the next three to four months. While opinion is polarised on prospects; a fifth (19%) anticipate a 25% to 50% increase in sales


July 2020


two-thirds are negotiating rent and lease reductions with landlords whilst a third have decided to leave their premises entirely as working from home has proven successful. Having faced a number of external shocks


as a result of the pandemic, 85% of business owners have felt out of control over the past three months. Given the impact of COVID-19, the lockdown, recession fears, and a no-deal Brexit 60% of owners feel exposed to conditions beyond their control. This was one of the major talking points


at last month’s CCRInteractive: Virtual, which is still available to view, free of charge, at www.ccrivirtual.com. I should say that we have been hugely proud of the levels of support that our online-con- ferences have achieved so far. This is, clearly, a time of tremendous change and uncertainty for everyone. Nobody knows when it might be safe to return to the large in-person conferences that used to be such a hallmark of the industry, it does not seem likely to be soon. Interestingly, our own research suggests people do not anticipate


feeling confident to return to a large confident to return to a large conference hall for at least the rest of this year. However, they are aware that the personal touch is important so they will be happy to attend smaller, more bespoke events like CCR’s round-table debates, so we will look towards beginning these again later in the year. Enjoy the magazine!


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