A report by insurance provider, Simply Business, has revealed that small businesses have lost £15,673 so far on average throughout COVID-19, but expect total losses to reach £22,461. A further one in 10 (8%) expect the pandemic to cost them over £50,000 in total.
With regards to financial support, the study found more than 2.2 million small businesses – including freelancers and contractors – (37%) are still unable to access government support.
For those that have been able to access COVID-19 support schemes, a third (33%) received grants through the Self-Employment Income Support Scheme (SEISS), a quarter (26%) took out bounce back loans and a fifth (18%) were able to get financial aid through the Local Restriction Support Grant.
Despite this, the majority (81%) of small businesses said the support they have received from the government has not been enough, with nearly half (41%) stating they did not feel supported at all.
In fact, nearly one in two (46%) said the government not only should have offered a wider range of emergency financial support but made it easier for businesses to access the schemes. While a quarter (24%) said support should have been released quicker with better communication and transparency from the government.
The equivalent to more than 840,000 small businesses said they do not believe their companies will ever return to pre-pandemic levels, and a fifth believe it will take two to three years to recoup the money lost.
There are six million SMEs in the UK, which account for over 99 per cent of all businesses, 33 per cent of employment and 21 per cent of all economic turnover.
With the total cost of the pandemic set exceed £12.6 billion, Alan Thomas, UK CEO at Simply Business said this billion-pound “hole in the books of small businesses is a huge blow” and has the potential to send devastating ripples through the economy.
He added: “No business, big or small, has been able to escape the impact of the COVID-19 pandemic – with 12 months of restrictions, lockdowns and uncertainty always likely to take its toll. The scale of the impact across this last year felt by the self-employed is abundantly clear in our latest research.
“[…] Beyond the unquestionable economic hit, we should also recognise that behind each of these small businesses is a small business owner – each with families, livelihoods and dreams. The impact of the pandemic on so many of these individuals has been devastating, both financially and emotionally.
“Yet in all of this, we have seen countless examples of the resilience, resourcefulness, and creativity that we have come to associate with the UK’s small business owners.”