75 per cent of SMEs in London are making strong post-pandemic recoveries, according to a new study investigating the impact of Covid-19 on small businesses.
Just weeks on from the relaxation of restrictions on July 19th, 50 per cent say they have already hit or surpassed pre-Covid levels of turnover, with another 25 per cent expecting to achieve that within a year.
More than 250 SMEs were involved in the survey by alternative lender Capify, which also highlighted how 39 per cent of London businesses had adapted their business models in some way to survive during lockdown. Adopting new services or products (45 per cent) and launching online sales (36 per cent) were the two most popular answers.
The findings also made good reading for employment statistics, with over 60 per cent of the region’s SMEs making no permanent cuts to their number of staff over the past 12 months, with 60 per cent using the Coronavirus Job Retention Scheme (CJRS) during the pandemic.
There was also high take-up of the Government’s Bounce Back Loan Scheme (BBLS), as over 50x per cent of North West SMEs used the support on offer.
The important role of alternative lenders alongside traditional banks through the pandemic was also highlighted, with 40 per cent saying they would look to alternative finance companies for future loans and finance.
And with the survey finding that one in three businesses expect to need finance during the next 12 months, John Rozenbroek, CFO/CCO at Capify says the need for a range of financial options to support the UK’s economic recovery is clear.
“It’s fantastic to see that the majority of London businesses are enjoying strong performances following the easing of lockdown restrictions, with many reaping the rewards of adapting their business models during the pandemic,” he said.
“The CJRS and BBLS clearly played important roles in keeping SMEs ticking over, but it’s also important to note that many small businesses went without much government support, having fallen through the gaps of various support schemes.
“Alternative finance has played a huge part in propping up and supporting businesses through the challenges of the last 18 months, and our data show that as an industry, it is now being considered by SMEs just as much as traditional lending options like high street banks.”
Despite the easing of restrictions, Covid-19 continues to impact North West SMEs with 65 per cent of survey respondents saying uncertainty over the future will be their number one challenge during the next 12 months.
“There is still a long way to go on the road to recovery for SMEs, even following the end of financial support from the Government, which is why alternative lenders like ourselves will need to be working closely with them,” added John.
“SMEs make up an incredible 99 per cent of the UK’s business population, and have companies across so many sectors have proven their resilience repeatedly, so it’s crucial for the economic recovery that SMEs continue to grow and succeed.”
