A third of Scottish business owners who have shut down operations during the coronavirus outbreak fear their firm may never re-open, according to a new survey from the Federation of Small Businesses (FSB).
As Chancellor Rishi Sunak announced an extension to the furlough scheme yesterday, the small business campaign group called for sustained government support for firms grappling with the impact of the crisis.
The FSB in Scotland also wants clear official guidance about the steps businesses north of the border should take before they consider re-opening.
The survey found that about half of Scottish firms (53%) have been forced to close since the beginning of the coronavirus outbreak, compared to four in 10 (41%) across the UK. Of those that have closed 35% are unsure whether they will ever reopen again.
Andrew McRae, FSB’s Scotland policy chair, said: “In the jaws of the crisis, a huge share of independent Scottish firms did the right thing, followed the official advice and shut their doors.
“Our new survey shows that many of these operators worry they’re closed for good.
“We’re certain, however, that with the right help from government, bigger businesses and the general public, we can ensure these fears aren’t realised. But this research does show that many local operators are on a knife-edge.”
According to the survey, about a fifth of Scottish businesses have failed to make, or faced severe difficulties in making, commercial rent or mortgage repayments as a result of the pandemic’s economic impacts.
Seven in 10 (71%) Scottish small employers have furloughed staff to aid the survival of their business.
Around three-quarters (70%) of these businesses say the ability to partially furlough workers would benefit them – half (46%) want to bring staff back gradually, and over a quarter (28%) say it would keep their business viable.
The chancellor yesterday said the scheme which pays 80% of staff wages, would continue until October, with employers to “start sharing” the cost of the scheme from August.
Mr McRae added: “When the time comes to begin to re-open, businesses won’t be able to go from nought to 60 overnight.
“For many employers, they’ll want to phase a return to test any new systems and to keep their staff safe.
“Allowing the partial furloughing of workers is a vital policy move that would allow many smaller firms to restart smoothly and sustainably.
“When the focus shifts from shutting down to reopening safely, Scottish businesses will want clear no-nonsense guidance. We’ll need to see sustained help on offer to help firms avoid stalling on restart.”