Nearly half of small businesses in the hospitality and property sectors are calling on Chancellor Rishi Sunak to extend the government’s financial support package for the sector in next month’s Budget as they struggle to stay afloat during continued lockdown restrictions, new research has found.
A survey of 500 companies by Recognise, UK’s newest SME business bank, found that many bosses want the continuation of initiatives such as the Coronavirus Business Interruption Loan Scheme (CBILS) and the Furlough Scheme, many of which are due to finish at the end of March*.
When firms were asked what support for small businesses they would like to see announced in the Budget on 3 March, Recognise found:
- 31% of all small businesses want to see an extension to the Coronavirus Business Interruption Loan Scheme (CBILS), rising to 47% of firms in the hospitality sector
- 28% of all SMEs surveyed want the government’s Bounce Back Loan Scheme (BBLS) to be extended, rising to 40% of retailers and 45% of property firms
- 26% of all firms say they want the 5% reduced rate of VAT for the hospitality sector to be extended, unsurprisingly this rose to 45% of businesses in the hospitality industry itself
- 24% of all the businesses questioned want an extension to the furlough scheme, which again rose in those sectors mostly badly hit, up to 31% of retail firms and 47% of hospitality businesses
Jason Oakley, CEO of Recognise Bank, said that while confidence is returning to the small business sector, many SMEs will need continued support over the coming months.
He said: “Since we opened our doors in November last year, we have already received over £200m worth of requests for lending from small and medium sized businesses, so there is clearly an appetite to fund continued growth or to reconfigure the way they operate in the new business environment.”
“However, for many SMEs, the financial support the government has offered over the last 12 months has been a lifeline. Now, as we are finally starting to see light at the end of the lockdown tunnel, extending this help for a little longer could be just what many small and medium sized businesses need to help set up the UK economy for a post COVID-19 recovery.”
Recognise’s survey found that while existing government support packages received the most backing from SMEs, some businesses would like to see the addition of further targeted measures in the Chancellor’s speech next month:
- 16% of all firms want the current 5% VAT rate for hospitality to be expanded to other sectors
- 15% of all SMEs questioned want a reduction in business rates for non-online businesses
- 12% want a VAT holiday for consumers to encourage spending
- 7% want more incentives like the Eat Out to Help Out scheme to encourage consumers
Recognise Bank, which is a subsidiary of AIM listed City of London Group plc, started offering lending services to the UK SME sector last year, with plans to introduce personal and business savings products later this year.
Recognise’s mission is to support small and medium sized businesses, many of whom are poorly served by the established high street business banks, using state of the art technology to provide a fast and efficient lending platform. This cutting-edge technology is backed up by dedicated Relationship Managers (RMs) based in London, the Midlands, Manchester and Leeds, who have a deep knowledge of industry sectors and a genuine appreciation for SME challenges, particularly in the current economic climate.
The research was carried out amongst a nationally representative sample of 500 senior decision makers in British SMEs on behalf of Recognise Bank by 3Gem.
*Applications for CBILS and BBLS are currently open until 31 March, 2021; the temporary 5% reduced rate of VAT for the hospitality sector currently applies to supplies up to 31 March 2021; currently the Furlough and Redundancy Scheme remains open until 30 April 2021.
Find out more by visiting the Recognise Bank website here