One fifth of cash-strapped firms in East Anglia ‘struggling to survive another month’ in crisis
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A leading accountant has warned that up to 50,000 jobs in the East are at risk if the government doesn’t speed up the availability of money for struggling businesses.
Kelly-Anne Byres, who runs Ipswich-based KBL accounts and handles the finances of more than 500 SMEs said that of the 600,000 businesses registered across Essex, Suffolk and Norfolk, around one fifth are struggling to get the cash they need to survive another month despite promises of unprecedented government support.
“Despite accountants all over the UK working all hours to push through paperwork, the money is just not coming through fast enough,” she said.
“Many businesses have some sort of cash cushion to deal with short-term cash flow issues but none have so much in their savings pot that it will keep them afloat week on week of complete lockdown.
“The utterly tragic reality of the fallout of the pandemic is that many small businesses just won’t survive.”
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Earlier this week the Corporate Finance Network, which represents accountants serving more than 12,000 small and medium-sized businesses nationwide, said that despite all the government support, 98% of their clients either possibly or definitely won’t get the cash they need to survive for four months.
They suggested that nationally, one fifth of SMEs – well over 800,000 businesses – may be on the brink of collapse.
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According to the latest figures from the Department for Business, Energy and Industry, there are 598,820 SMEs registered in the East of England providing employment to 2.9 million and with a combined turnover of £399million.
Mrs Byres said: “Based on these figures, we are talking about 100,000 small businesses in jeopardy as well as the jobs of about 500,000 people.
“Make no mistake about it, SMEs are crucial to the UK’s economy and their contribution is increasing every year. The consequences of losing these businesses will be mass unemployment and a severe strain on our ability to grow the economy when this pandemic has passed.”
One of the main issues for many businesses seems to be access to the Coronavirus Business Interruption Loans.
Mrs Byres said: “Many firms have told us that they can’t get these emergency loans because some banks are using personal guarantees in the form of savings and mortgages to secure lending to small businesses or putting in place punishing interest rates that made it impossible for companies to borrow money.
“When you think about what the government did to bail out banks during the recession, it’s a shame they are not being as accommodating with small businesses that desperately need their help to survive the next few months.
“We are hoping the announcement of the bounce-back loans will improve things but we wait to see how these will be implemented.”