A nationwide network of accountancy firms has warned that nearly one in five SMEs will not survive the next month due to the Covid-19 situation unless more effective rescue packages are put in place.
The Corporate Finance Network (CFN) represents a number of independent accountancy firms across the UK.
It said its members had carried out research among 13,000 SME businesses of all types, which predicted that 18% would not survive the next four weeks of lockdown – despite the support measures announced by the government.
Looking ahead three months, the figure for likely collapses rises to 31% if the current restrictions continue.
CFN claimed that almost 4m people could lose their jobs in the next few weeks.
It is proposing a ‘Rescue and Recovery’ incentive scheme to allow more robust SMEs to buy “at risk” businesses in their sector. It is asking the Treasury to support the proposal, possibly via the existing network of Local Enterprise Partnerships.
CFN founder Kirsty McGregor said: “We have taken it upon ourselves to create a robust and fully researched ‘plug and play’ solution for the logistics of this SME rescue scheme, and we already have in place a portal to advertise the businesses on, accountants on stand-by to advise on the structure of any deal, and lawyers to prepare the legal documentation, all working to minimum fees using streamlined agreements, and all can be finalised to launch within a week.”
Separately, the BPIF has called upon the government to do more to help print businesses affected by the virus crisis.
Chief executive Charles Jarrold said the impact on the printing industry had been “huge”. The federation called for the following:
- Clarification and detail added to the definition of essential services, with certain sections of the printing industry being recognised as being explicitly essential. While we believe the current guidance to be clear that printing companies are able to continue to operate, confusion on the ground means that employers need further support to demonstrate this.
- Flexibility to what has already been laid out by the Job Retention Scheme, particularly around the furloughing of workers. While the JRS has been well received, and with great relief, there is concern that, without adjustments, it will not deliver as effectively as it otherwise could.
- For the Government to engage in additional dialogue with lenders taking part in the CBIL Scheme, to ensure that lenders are interpreting the government’s intentions correctly. This will help businesses to feel secure about the Scheme, increase uptake and – importantly – improve confidence that the government’s good intentions to support businesses are being realised by the banking industry.
The BPIF’s Coronavirus Business Impact Survey, which it is running in conjunction with supplies and services federation Boss, is open for input until Friday.
The early results showed that an alarming 78% of respondents had experienced a “considerable downturn” in business due to the pandemic.
The IPIA and BAPC are also carrying out an impact survey of members, which can be found here.
As part of a concerted industry lobbying push, IPIA and BAPC representatives have also met with representatives at the Department for Business, Energy, & Industrial Strategy (BEIS) and confirmed guidance that all print production can currently remain open for business, with the exception of public-facing print shop counters.
In a joint bulletin the two organisations said that print businesses did not need to seek special status in order to continue to trade.
Mike Roberts, president of the IPIA and managing director of Birstall-based PMG Print Management commented: “We have been in direct and intense dialogue with BEIS since the Covid-19 crisis broke and our place is making sure that we represent the print industry to the very best of our abilities so that the economic damage that is being done to our sector is minimised as much as possible.”