By John Reynolds on Tuesday 7 April 2020
Tide's research found that the small businesses in telecoms and IT expect themselves to be least impacted by the coronavirus fallout.
Small business revenues are forecast to be down nearly 60 per cent year-on-year in April, according to Tide, which has carried out research revealing that nearly a quarter of IT and telecoms businesses don't expect to see any decline in revenues following the economic turmoil caused by coronavirus.
Tide, which provides banking services for small and medium-sized businesses (SMEs), surveyed over 1,000 small businesses, which have up to 49 employees, to gauge their financial health amid the financial devastation caused by the virus.
Three in four (75 per cent) businesses said they have been negatively impacted by Covid-19 to date and this impact looks set to worsen in April.
Four in five (80 per cent) forecast that their revenue will decline in April this year, while over one in three (36 per cent) expect their revenues to decline by more than 90 per cent.
The research found that the industries expected to be worse hit are leisure and hospitality, with 64 per cent expecting to see their revenue decline by 100 per cent, followed by retail, with 38 per cent expecting their revenues to totally disappear.
Small businesses in IT and telecoms expect themselves to be least impacted, with just under a quarter (23 per cent) saying they don't expect to see any decline in their revenue on the year.
Tide has crunched these numbers to calculate that, if these forecasts are realised, small business revenues will decline by around 57 per cent throughout April this year.
Tide said it has already seen a 20 per cent decline on its platform in the last seven days of March.
The research also found that 37 per cent of all businesses have cash reserves that will last them six weeks or less without government support while 19 per cent only have cash reserves that will last up to three weeks.
One option for struggling SMEs is the government Business Interruption Loan Scheme, launched amid the coronavirus fallout.
UK-based small and medium-sized businesses (SMEs) with an annual turnover of less than £45m can apply for an interest-free loan of up to £5m to help them through Covid-19 related difficulties.
“From the conversations, we have had with our 150,000 SME members we knew the situation was very tough, but this data has relieved just how tough it is, and how much harder it is likely to get for small businesses to weather this storm.”
“The government’s support for small businesses is highly welcome and needed, and it has the potential to make a huge difference in helping SMEs survive. There now needs to be a focus from the government, and other organisations involved in delivering financial support, to do everything possible to get the money into small businesses’ hands as soon as possible.”