Cash remains top concern for lockdown-stricken firms - British Chambers

Businesses are being pushed to the brink by lockdown restrictions - with cash remaining the primary concern.

That 's according to the latest British Chambers of Commerce Coronavirus Survey of more than 1,100 businesses, which reveals:

• Three in every five firms (61 per cent) have seen their revenue from UK customers fall in the last three months
• Almost a third (31 per cent) of business-to-consumer (B2C) firms say they will run out of cash in the next three months
• A quarter of survey respondents (25 per cent) say they will make staff redundant if financial support stops in March and April.

The British Chambers has called on the government to set out a clear roadmap for reopening, advancing vaccination and workplace testing plans, and extending key financial support measures for businesses throughout 2021.

Compared to October 2020, 61 per cent of firms reported decreased revenue from UK customers.

Only 19 per cent of firms reported increased revenue and 20 per cent reported no change. B2C service firms are significantly more likely to report decreased revenue (74 per cent) from UK customers, as are firms with less than 10 employees (65 per cent).

When asked approximately how long firms could continue until they ran out of cash, 23 per cent said less than three months. This figure rises to 31 per cent of B2C service firms.

Just over one quarter (28 per cent) of firms overall and only 20 per cent of B2C firms have cash for more than 12 months.

The survey results also suggest that without the huge amount of government support given to companies to date, that business failures and job losses could have been much worse.

Just 28 per cent of businesses indicated they have enough cash to last more than a year.

On average, B2C firms are currently operating at only 42 per cent of full capacity, while all firms were averaging 57 per cent capacity against a pre-pandemic level of 75 to 80 per cent. Almost half (48 per cent) of companies reported they still have staff on furlough.

When asked to rate the effectiveness of the various government schemes to support their business throughout the crisis, the furlough scheme had by far the highest effectiveness rating, with 68 per cent of firms using it saying it has been very effective. A further 28 per cent rating it as somewhat effective, while 4 per cent said it was not effective.

When asked what their business might do if the government support schemes end according to published timetable in March and April, 25 per cent of firms overall said they would 'make staff redundant ', 25 per cent would 'reduce staff hours ' and 19 per cent would 'cancel or reduce investment or recruitment plans '.

Only 21 per cent of B2C firms said the expiry of support 'would have no impact on their business ', compared with 39 per cent of B2B firms and 37 per cent of manufacturers.

BCC director general Dr Adam Marshall (pictured) said: With cash flow still the top concern, it is vital that the UK government keeps financial support going until firms can reopen and rebuild.

“Pulling the plug now would be a huge mistake, and would be akin to writing off the billions already spent helping firms to survive.

“Firms are desperate to start trading again so they can boost revenue and start thinking about the future.

“To do so they need to see a clear, evidence-based plan for reopening, and they need time to get back on their feet without unnecessary additional taxes, and the security of knowing that Government will once again support them should we see additional restrictions imposed at any point.

“In the meantime, support must remain in place for firms that need it until a full reopening of the economy is possible.

“With cashflow being a major challenge for many businesses, we can expect to see further redundancies or business failures should Government support end prematurely.

“Alongside a clear roadmap for reopening, business confidence will also come from a commitment to further accelerate the vaccination programme and a wider workplace testing strategy that 's accessible to businesses of all sizes. ”