Covid: At least 250,000 small businesses set to fold

A record number of small business owners are planning to close their firms over the coming twelve months, putting the UK on course to lose more than a quarter of a million businesses, according to the latest Small Business Index (SBI).

Just under 5% of the 1,400 firms surveyed for the study say they expect to close this year. The figure does not reflect the threat of closure faced by those hoping to survive despite having frozen their operations, reduced headcounts or taken on significant debt.    

Of those surveyed, 23% of small businesses have reduced the number of employees in the last quarter, alone, representing a ten per cent rise over the beginning of last year.

Some 14% of small businesses reported that they will be forced to slash the number of people they employ over the next three months.

The number of small firms predicting that they will see their profitability decline over the next quarter has also reached an all-time high, with 58% fearing profits will go down.

Almost half (49%) of exporters expect international sales to drop this quarter, up from 33% at this time last year.  

The dire warnings from small business come as the latest national lockdown imposed by Prime Minister Boris Johnson is expected to plunge millions of workers back into furlough schemes.

Coming almost entirely at taxpayer expense, the furlough programme has already cost the UK Treasury over £46 billion and is expected to only grow higher.