BCC: Nearly two-thirds of UK businesses only have three months of cash reserves
Results from the British Chamber of Commerce’s (BCC) first COVID-19 Business Impact Tracker paint a concerning if unsurprising picture for business communities affected by coronavirus, as almost two-thirds of UK businesses reported that they only have three months of cash reserves available.
The tracker found that 18% of businesses reported they had less than a month’s worth of cash in reserve, while 44% reported only 1 to 3 months’ worth of cash in reserves.
A meagre 6% have said that they have over 12 months worth of cash in reserve to support their businesses.
The BCC’s new tracker will serve as a barometer of business’ response to the government’s measures and changes to business’ working practices over the next few months. It will also track how quickly new government interventions, introduced to deal with the real-world impact of this crisis, are getting to the businesses at the front line.
The first set of polling was conducted from 25-27 March with responses from over 600 businesses.
Following the government’s pledge to cover 80 per cent of a furloughed employee’s salary up to £2,500 a month, 32% of respondents said that they were planning to furlough between 75 to 100% of their workforce over the next week.
More than a quarter of firms (26%) were not due to use the scheme in the next week.
A majority of businesses have reported that they have embraced the changes in working culture, with two-thirds of respondents (66%) using remote working and half (50%) using videoconferencing.
However, 18% of businesses had closed operations temporarily and, although no respondents had yet closed business operations permanently, both figures are expected to rise over the coming weeks and months.
Encouragingly, most businesses reported awareness of the government’s recent support schemes to help mitigate the impact of coronavirus.
A total of 61% of firms knew details of the business rates holiday for the retail, hospitality and leisure sector, with 59% aware fo the details of the Coronavirus Business Interruption Loan Scheme. A total of 57% of firms knew details of the Statutory Sick Pay refund.
The percentage of firms actively in receipt of this support was low but this is expected to rise in the coming weeks following the government’s official launch of the Coronavirus Business Interruption Loan Scheme and Job Retention Scheme on Monday 23 March.
Dr Adam Marshall, BCC director general, 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.
“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.
“Chambers and their members are working together to play their part, including gathering unused PPE equipment from local businesses and delivering them to the NHS. 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.”
Read all of our articles relating to COVID-19 here.