Help small firms or risk financial crisis
SMALL businesses are calling for urgent support from the Government and larger firms to prevent a wave of company collapses and job losses as fresh Covid-19 restrictions bite.
This is needed to avert economic disaster as the UK’S 5.8 million small businesses employ 16.6 million, around three-fifths of total jobs.
Millions of people have been hit with local lockdowns and Mike Cherry, national chair of the Federation of Small Businesses, said local authorities and government must offer clear guidance to small firms and the public in affected areas.
He called for fresh support after the furlough scheme ends on October 31, including cuts to business rates and National Insurance contributions running into 2021: “Small firms can then retain and hire staff, and invest in their businesses.”
The hardest-hit sectors such as leisure and hospitality need extra targeted support: “This is critical to saving jobs.”
Cherry also called for a fast track-and-trace system: “That is the only way small business owners can reopen.”
Some larger companies started paying smaller suppliers
immediately to keep them afloat but instant payment company Previse’s chief executive Paul Christensen said many have since reverted to lengthy payment terms. “Some are even demanding discounts from small businesses.”
Late payments totalled
£23 billion last year and Christensen said: “Every small business deserves the right to day-one payment.
Every corporate can provide it easily.”
He added: “We need to take on the inertia that small
businesses face when trying to get invoices paid on time.
“This can make the difference between being able to keep the lights on, or going out of business.”
Michelle Ovens, chair of the Small Business Charter, said small businesses must be flexible in order to survive: “They need to consider what their customer wants now, not nine months ago.”
She said initiatives such as the Small Business Leadership Programme, offered free online, can help.