Businesses don't have money in the bank to cope with coronavirus crisis
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BUSINESSES need promised government support urgently to see them through the coronavirus crisis, the British Chambers of Commerce (BCC) has warned after finding most firms have less than three months' worth of cash reserves.
The worrying figures were among the findings from the first BCC Coronavirus Business Impact Tracker survey.
The survey found that the majority of firms (62 per cent) have three months’ cash in reserve or less, with 18 per cent operating on less than a month's worth of reserves and 44 per cent reporting only one to three months’ worth of cash in reserve. Only six per cent of respondents reported more than 12 months’ worth of cash in reserve.
Almost half of respondents (44 per cent) expect to furlough at least 50 per cent of their workforce, with almost a third (32 per cent) of respondents saying they were planning to furlough between 75 to 100 per cent of their workforce.
More positively, a majority of businesses have embraced the changes in working culture, with two-thirds of respondents (66 per cent) using remote working and half (50 per cent) using video-conferencing.
However, 18 per cent of businesses had closed operations temporarily, although none of the respondents had yet closed business operations permanently.
Encouragingly, most businesses reported awareness of the government’s recent support schemes to help mitigate the impact of coronavirus.
BCC director general Dr Adam Marshall said: “The coronavirus pandemic has taken a heavy toll on business and economic activity across the UK.
“While businesses have welcomed the unprecedented size and scope of the government support packages, our findings highlight the urgent need for that support to reach businesses on the ground as soon as possible. The majority of firms cannot wait weeks or months for help to arrive."
However, Dr Marshall also praised the response of local chambers and their members to the pandemic, such as finding way finding ways to supply NHS staff with protective equipment. This includes Inverness Chamber of Commerce and its members, which helped two local firms create and manufacture protective face shields for the city's Raigmore Hospital.
“There’s no escaping the scale of the challenge UK businesses are facing, yet many are already finding ways to contribute to the national effort to tackle coronavirus," he said.
"I’ve no doubt we will see further examples of resilience and innovation – the hallmarks of the UK business community – in the coming weeks and months.”
