A report just published has shown there were record levels of small- and medium-sized enterprises applying for funding during the period 2020/2021, due to the Covid-19 pandemic. The British Business Bank’s Small Business Finance Markets report shows that 89% of all businesses applied for credit in 2020 with 45% of SMEs asking for funding compared to just 13% in the previous year.
Dire straits for many SMEs
The Coronavirus pandemic has put many businesses under immense strain, with the majority forced to close and put their staff on furlough. Earning enough money to keep their businesses ticking over has clearly proved too much of a challenge for many, which is why government support in the shape of things such as the furlough scheme and Bounce Back Loans has been so widely welcomed.
Overall bank lending to small businesses is said to have risen to £104 billion in 2020, which is 82% higher than the previous year, according to the British Business Bank report. The research also found that government grant funding was 29% higher in 2020, rising from just 2% in 2019 to 31% in the year of the pandemic.
What happens next?
All the government measures put in place are, however, only a temporary fix, and all forms of government support are due to be gradually wound down over the course of the coming year. That will leave many SMEs with funding difficulties which will be hard to overcome. That will require detailed financial planning in order to keep many businesses afloat and reduce redundancy rates.
For a large number of smaller companies, the best way to proceed is to find a reputable accountancy firm that can take care of the bookkeeping and ensure those businesses are able to access all the tax relief and financial support they can going forward. An accountant would be able to handle all the business finances and help put your company on more stable financial ground.
To find out more about the services provided by CWR Chartered Accountants, simply get in touch with our expert team today.