Small and medium-sized enterprises (SMEs) in the UK expect to borrow £48.3 billion to support their business following the Covid-19 outbreak, according to new research from Aldermore.
61% of SMEs anticipate borrowing nearly £65,000 in the following 12 months after the outbreak. Speedy access to funding (23%), higher levels of funding (17%) and a simple application process (17%) are viewed as needed by SMEs to navigate the months following the outbreak.
Tim Boag (pictured), group managing director, business finance at Aldermore, said: “Helping SMEs recover following the pandemic will be crucial to the economic future of the UK. As our research has shown, SME income has been hit hard by Covid-19 with many having borrowed funds in order to survive, and with some expecting to continue to do so in the year ahead.
“Aldermore’s focus is on backing our customers through this period, continuing to work closely with them and responding to their needs, as well as providing access to funding and the guidance they are looking for. The year ahead is going to be as equally, if not more, challenging as the aftermath of the financial crisis, when Aldermore was established. Our research shows that the average SME expects it will take them eight months to financially recover after the lockdown ends, and it is going to need a considerable concerted effort by both government and lenders to support businesses to help get them back on their feet.”
32% of SMEs say the key to getting their business back on track following the Covid-19 outbreak will be good communication with their customers and clients. A further 25% state they will benefit from receiving ongoing government support with 22% of SMEs also suggesting that getting employees back on track and focused on the business’ goals will be important in recovery phase. Rebuilding supply chains and relationships with suppliers is seen by 17% of SMEs as crucial in helping their business recover following the Covid-19 outbreak.