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Hot Business News Today
Number of small businesses in distress triple pre-Covid level
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
The number of small businesses in distress has tripled compared with the pre-pandemic average, according to figures from accountancy firm Mazars.
This month almost 135,000 businesses are showing strain, as the impact of a year of Covid-19 restrictions reverberates.
Businesses in the services and retail sectors accounted for almost three-fifths of those showing distress, said Mazars. Sectors allowed to reopen were faring better, with construction and manufacturing businesses making up 7.9 per cent and 6.7 per cent of those in distress respectively.
>See also: UK-EU exports fell by over 40% in January 2021
Paul Rouse, partner at accountancy firm Mazars, said: “During more normal circumstances, we expect between 40,000 and 50,000 companies to trigger one of our negative health markers. Today- even with many Government support measures still in place – we are seeing roughly three times that amount: 135,000.
Rouse said that even these higher figures represented “the calm before the storm” as “significant amounts of business distress” would be felt once the Government withdrew its coronavirus financial support.
London accounts for just over a quarter of businesses in distress (25.58 per cent) followed by businesses more generally in the South East outside the M25 (18.44 per cent).
>See
Hot Business News Today
Number of small businesses in distress triple pre-Covid level
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
The number of small businesses in distress has tripled compared with the pre-pandemic average, according to figures from accountancy firm Mazars.
This month almost 135,000 businesses are showing strain, as the impact of a year of Covid-19 restrictions reverberates.
Businesses in the services and retail sectors accounted for almost three-fifths of those showing distress, said Mazars. Sectors allowed to reopen were faring better, with construction and manufacturing businesses making up 7.9 per cent and 6.7 per cent of those in distress respectively.
>See also: UK-EU exports fell by over 40% in January 2021
Paul Rouse, partner at accountancy firm Mazars, said: “During more normal circumstances, we expect between 40,000 and 50,000 companies to trigger one of our negative health markers. Today- even with many Government support measures still in place – we are seeing roughly three times that amount: 135,000.
Rouse said that even these higher figures represented “the calm before the storm” as “significant amounts of business distress” would be felt once the Government withdrew its coronavirus financial support.
London accounts for just over a quarter of businesses in distress (25.58 per cent) followed by businesses more generally in the South East outside the M25 (18.44 per cent).
>See
Hot Business News Today
Covid debt drowning small businesses to the tune of £104bn
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Bank lending to small businesses hit over £100bn last year as SMEs scrambled for Government-backed Covid debt facilities.
Overdraft applications flatlined, despite gross bank lending to SMEs rising by 82 per cent to £104bn.
Around 1.5m Bounce Back Loan and Coronavirus Business Interruption Loan Scheme Covid debt facilities had been approved by the end of 2020.
And nearly one third of businesses accessed grant funding last year, compared to just 2 per cent in 2019.
The pandemic has hit the smallest firms hardest, with 49 per cent of sole trader and self-employed businesses reporting a fall in turnover compared to 38 per cent of businesses with 50-249 employees.
Worryingly, despite the flood of cheap Government lending, one third of small businesses surveyed in the latest British Business Bank report expect to shrink.
Only one in five (21 per cent) were expecting to grow, compared with 28 per cent the previous year.
SMEs in business services (25 per cent) and production (23 per cent) sectors were most optimistic about their prospects for growth over the next year, with businesses in construction and other services sectors least optimistic (both 17 per cent).
Encouragingly, small businesses have amassed a war chest due to the
Hot Business News Today
Government Bounce Back Loan for your small business
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
What is the latest Bounce Back Loan news?
The Government launched the Bounce Back Loan Scheme (BBLS) on May 4 2020 to help small and microbusinesses get through the coronavirus pandemic.
Your small business can borrow a sum equivalent to up to 25 per cent of turnover, capped at £50,000 per business.
The Government will cover the first year of interest payments, meaning you have to repay the rest of the loan yourself. Interest is fixed at 2.5 per cent per annum.
Because the Government Bounce Back Loan is unsecured debt, this means the 29 accredited lenders including the high-street banks cannot ask you for personal guarantees. This means the lender cannot come after your house or personal vehicle if you default.
However, the Government Bounce Back Loan must be repaid and is not a grant.
When does the Bounce Back Loan end?
The Government Bounce Back Loan Scheme (BBLS) is due to expire on March 31.
Am I eligible for a Bounce Back Loan?
Most businesses with some exceptions can apply for a Bounce Back Loan provided they were properly trading before March 1 2020.
You must not have taken out any other form of Government Covid-19 financial support, such as a
Hot Business News Today
Small business should get HMRC refund to cover Covid losses, say MPs
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Small business and the self-employed should get a tax refund to cover their Covid losses, an influential Treasury select committee has recommended.
Under a “loss carry-back” scheme, any business, whether it’s a limited company or a sole trader, would get a cheque back from HMRC reimbursing them for Covid losses, providing they paid tax in Britain for three years before the pandemic.
A similar policy was adopted during economic crises in 1991 and 2008.
>See also: Restart Grant for your small business – what is it and where to claim
The Government should also look favourably on a further extension of the Annual Investment Allowance – which provides tax relief for expenditure on most plant and machinery – and possibly keep it permanent at the current level.
In its Tax After Coronavirus report, the select committee says that now is not the time for tax rises or clawing money back post pandemic. That said, significant fiscal measures, including revenue raising, will possibly be needed in the future, MPs said.
A moderate increase in corporation tax could raise revenue without damaging growth, the committee agreed.
Rishi Sunak is reportedly going to announce a stepped increase in corporation tax from 19 per
Hot Business News Today
Half a million businesses at risk of collapse without more support
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
More than half a million businesses are at risk of collapse by the spring unless the government extends Covid business support.
So says thinktank the Institute for Public Policy Research (IPPR) in its latest report.
The 600,000 businesses at risk of collapse without more support together employ approximately 9m people, “whose jobs could be lost” said the left-of-centre thinktank.
Small businesses (which together are responsible for a large share of UK employment) are most at risk of bankruptcy. About 40 per cent of firms with fewer than 50 employees have less than three months of remaining cash reserves.
>See also: SME owners hold £1.2bn of personal liabilities linked to Covid-19 loans
Half of all hospitality, food and other specialist service companies have less than three months’ cash left, as do 40 per cent of arts and entertainment businesses.
Overall, the number of companies with “dangerously low” cash buffers has risen sharply over the four months to the end of January, as national lockdowns slash trading, the IPPR said.
The chancellor should use the March 3 Budget to extend the furlough scheme, due to end in April, issue more grants, and take equity stakes in businesses in exchange for cash injections,
Hot Business News Today
Half a million businesses at risk of collapse without more support
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
More than half a million businesses are at risk of collapse by the spring unless the government extends Covid business support.
So says thinktank the Institute for Public Policy Research (IPPR) in its latest report.
The 600,000 businesses at risk of collapse without more support together employ approximately 9m people, “whose jobs could be lost” said the left-of-centre thinktank.
Small businesses (which together are responsible for a large share of UK employment) are most at risk of bankruptcy. About 40 per cent of firms with fewer than 50 employees have less than three months of remaining cash reserves.
>See also: SME owners hold £1.2bn of personal liabilities linked to Covid-19 loans
Half of all hospitality, food and other specialist service companies have less than three months’ cash left, as do 40 per cent of arts and entertainment businesses.
Overall, the number of companies with “dangerously low” cash buffers has risen sharply over the four months to the end of January, as national lockdowns slash trading, the IPPR said.
The chancellor should use the March 3 Budget to extend the furlough scheme, due to end in April, issue more grants, and take equity stakes in businesses in exchange for cash injections,
Hot Business News Today
Local authorities blame government for slow release of Covid-19 grants
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Local authorities have blamed government for the slow payment of Covid-19 grants during lockdown, with businesses still waiting for cash.
Although government says it has paid out the £4.6bn worth of Covid-19 grants to be distributed by all 314 local authorities over the current national lockdown, it still has to release of the £12bn worth of support first offered last year.
There have been 10 different tranches of funding to keep small businesses going through local-tier restrictions established in October and the one-month lockdown for England that ran from November 5.
>See also: £9000 lockdown grant for businesses in retail, hospitality and leisure
The schemes also cover support for different regional restrictions in December and the current lockdown in England, which is expected to run until at least February 22.
The Local Government Association says that councils have also been struggling to distribute the money, due to increased state-aid compliance issues and vetting applicants for fraud. They have focused on getting larger amounts for January’s closures out the door, as opposed to last year’s smaller grants.
But businesses still awaiting grants say they may not still be in business by the time money is finally released.
>See also: Where to
Hot Business News Today
Local authorities blame government for slow release of Covid-19 grants
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Local authorities have blamed government for the slow payment of Covid-19 grants during lockdown, with businesses still waiting for cash.
Although government says it has paid out the £4.6bn worth of Covid-19 grants to be distributed by all 314 local authorities over the current national lockdown, it still has to release of the £12bn worth of support first offered last year.
There have been 10 different tranches of funding to keep small businesses going through local-tier restrictions established in October and the one-month lockdown for England that ran from November 5.
>See also: £9000 lockdown grant for businesses in retail, hospitality and leisure
The schemes also cover support for different regional restrictions in December and the current lockdown in England, which is expected to run until at least February 22.
The Local Government Association says that councils have also been struggling to distribute the money, due to increased state-aid compliance issues and vetting applicants for fraud. They have focused on getting larger amounts for January’s closures out the door, as opposed to last year’s smaller grants.
But businesses still awaiting grants say they may not still be in business by the time money is finally released.
>See also: Where to