Pandemic hits small firms

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Pandemic adds £173k to small firms’ debtsA study by cloud computing firm Sage suggests that the coronavirus crisis is likely to give SMEs an additional £173,000 debt pile each year. The report surveyed more than 1,000 small businesses and found that around half have taken out a pandemic-related loan, leaving firms with an average additional debt burden of around £173,000 once repayments begin. Almost a third of those surveyed said they were unsure how they would clear their debts. The report notes that SMEs have seen revenues slide by more than 20% on average during the latest lockdown, with this coming on the back of a 41% decline in revenue last year. On possible support measures, more than 70% of SMEs surveyed backed an extension of the VAT cut, saying it would provide “breathing space” and prevent wide-scale job losses.

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