Small and medium-sized enterprises (SMEs) are no doubt essential to our economy, however, with a lack of enough government support, many SMEs are finding themselves struggling to survive during lockdown, particularly those in the hospitality and retail sectors.
22 leading accounting firms have called for more support, and suggest there should be more grants than loans or payment deferrals.
Anthony Carey, Head of Board Practice at Mazars said:
“Given the importance of SMEs in revitalising the economy it is critical that we review the operation of the various schemes on an ongoing basis. Getting cash to SMEs promptly is one of the key measures of success.
We must get the right help to them now and to ensure that we are not just kicking the problem down the road for a repayment crisis early next year. This may also require a rebalancing of loans and payment deferrals in favour of some more grants”.
The most recent Manufacturing Barometer Revealed that 84% of SMEs surveyed felt they required urgent financial support due to the current climate, leaving only 16% of the opinion that the government is doing enough to help out.
The report also showed that 55% of companies believe they will need to make redundancies between now and October despise the help form business grants and the furlough scheme that was designed to encourage employee retention.
One in four manufacturers taking part in the survey emphasise the need for supply chain support after the pandemic revealed how reliant they have become on oversees supplies of strategically critical items.
In a survey taken in April 2020, senior experts found the Coronavirus Job Retention Scheme was the most effective at helping SMEs Even with adjustments made to the schemes, the Coronavirus Business/Large Business Interruption Loan Schemes are still being viewed as the most problematic as there are worries that it may lead to cash flow problems when deferred payments are due in 2021.
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