In Focus Commercial Credit
SMEs spending over £20,000 to reopen
Now is a time of tremendous risk for companies, even as they start to go back to work
Chirag Shah Chief executive, Nucleus Commercial Finance
As businesses begin to reopen across the country, our research reveals that SME owners are having to spend on average £21,830 to fully reopen, with over a fifth (21%) planning on using their personal savings to cover the costs. This comes at a time when SMEs have
already reported an average loss of £251,471 (sole traders: £8,671, micro: £47,218, small: £364,128 and medium: £665,299) due to the impact Covid-19, according to the research.
contactless payment systems were noted as a much larger concern for medium-sized businesses (51-249 employees), standing at 28% and 22% respectively.
Funding reopening costs The research found that on average these SMEs have £29,983 of cash reserves available, however many business owners are reluctant to use all of this to reopen as it could leave them in a vulnerable position if economic activity does not improve.
income been devastating for many SMEs, but those businesses that are able to reopen in some capacity now face significant costs to ensure they can operate safely, putting a further strain on business finances.
Survive and thrive We need to help SMEs not only survive the current pandemic, but thrive in the future. As such, we, as an industry, need to
highlight the role that finance can play in the short-term, but also to support longer-
For businesses that have already reopened following lockdown, implementing new health and safety measures was the biggest cost factor (44%). This was followed by staff salaries (33%) and reconfiguring the layout of the space
Health and safety For businesses that have already reopened following lockdown, implementing new health and safety measures was the biggest cost factor (44%). This was followed by staff salaries (33%)
and reconfiguring the layout of the space (26%). While the top three factors remained
the same for businesses of all sizes, investing in new technology and introducing new
September 2020 Rather than approach a bank or an
alternative lender to help with cashflow, 28% plan on using cash reserves in the bank, over a quarter (27%) are considering using government support schemes including CBILS, BBLS and CLBILS, and a fifth (21%) plan on using personal savings for reopening costs. The last few months have been a turbulent
time for businesses both large and small across the country. Not only has the loss of
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term business goals and help them future- proof their business. During these uncertain times, business
owners should rest assured that there are options available, and it’s our duty as an industry to educate them on the benefits of external finance. Together, we can help build a better future for SMEs, ensuring they are equipped to tackle further challenges, boost performance, and ultimately stimulate our economy. CCR
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