40% Of Small Businesses May Close Says FSB

Almost two fifths of NI small businesses fear never opening again, survey results reveal.

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Almost two fifths of NI small businesses fear never opening again, survey results reveal.

Many small businesses across Northern Ireland are bracing themselves for an end game. In the absence of full government support across the board, it is inevitable that businesses will collapse in the wake of the Covid-19 epidemic.

  • New Federation of Small Businesses (FSB) survey of over 200 NI firms lays bare the impact of coronavirus pandemic.
  • Almost half of small employers consider redundancies as they struggle to pay bills, shelve exports and pause product development.
  • FSB calls for introduction of part-time furloughing as it highlights those struggling to access government schemes and Universal Credit.

A new study from Northern Ireland’s largest business group representing local SME’s underscores the threat posed to millions of livelihoods across the UK by a sudden retraction of support for small firms in the weeks ahead. 

FSB’s fresh survey of 239 small business owners in Northern Ireland finds that nearly 6 in 10 (57%) have been forced to close since the beginning of the coronavirus outbreak. Of those that have closed, 37% will not reopen or are unsure whether they will ever open again.

More than a third (35%) have failed to make, or faced severe difficulties in making, commercial rent or mortgage repayments as a result of the pandemic’s economic impacts. A similar proportion (26%) have had to shelve product development plans.

In response to the strain being placed on them, almost half (46%) of small employers have either made, or are considering, redundancies.

Almost four in five (79%) small employers have furloughed staff to aid the survival of their business. Nearly three quarters (73%) of these businesses say the ability to partially furlough workers would benefit them – more than half (53%) want to bring staff back gradually, and nearly a third (29%) say it would keep their business viable.

FSB NI Policy Chair, Tina McKenzie said: “Many firms in Northern Ireland are concerned about the future viability of their businesses. Government, both at Stormont and Westminster, have brought forward considerable support for the small business community, from income support schemes, to cash grants, to help with accessing finance; But, of course, we are acutely aware that many have fallen through the gaps, and the support has been insufficient for some.

“It is now recognised that the risks associated with coronavirus will not disappear quickly, and it is therefore vital that support for business does not fall off a cliff-edge and is tailored to reflect conditions.

“For example, in the case of the Job Retention Scheme, there is clearly an awareness that workers cannot be furloughed indefinitely. However, government should consider a flexible approach, which can enable staff to be part-furloughed, allowing the business to get back on its feet gradually as the public health situation improves and commercial activity increases. This would enable the Job Retention Scheme to serve its original purpose – to avoid, rather than to delay, mass redundancies.

“Small businesses know that they can’t be sustained on the public purse forever but, in order to alleviate some of the pressure they are facing, it is crucial that we look ahead to the recovery phase.

This will require businesses to be clearly advised on how to operate safely and supported to make the necessary adjustments. Doing this properly will enable the economy to recover more quickly and could avoid a prolonged, deep recession, which would have significant economic and social ramifications.”