How many businesses are using government help during Covid-19?
A brief guide to the scale of the impact of Covid-19 on SMEs
The government's early estimates of how much money might be needed to weather the Covid-19 storm have become rapidly outdated. In simple terms, the government has already spent at least double what it predicted in helping UK businesses.
Firms of all shapes and sizes continue to use the furlough scheme, rates relief, low interest loans and more measures besides, in an attempt to remain resilient enough to bounce back when some sort of normality returns.
But just how many employees have been furloughed? And how big has uptake been for various business initiatives? Here's a brief summary to date:
A quarter of employees on furlough
It's now estimated that around one in every four UK employees is on furlough - which amounts to 9 million people. This has been a vital tool for small businesses to protect their cashflow and retain their staff. The big question now is what happens when the scheme comes to an end over the coming months.
2.6 million self-employment claims made
A similar scheme set up for self-employed workers, which provides a one-off grant, has seen 2.6 million claims made worth a huge £7.5 billion. This scheme will also be phased out towards the Autumn.
Bounce Back loans receive 100,000 applications on first day
Bounce Back loans, which are simple to apply for and come with no repayments in the first year, have had an incredible response across the UK. Simpler than the Coronavirus Business Interruption Loan Scheme and designed more specifically for micro businesses, funds are often released within 24 hours and the long-term interest rate is capped at 2.5%.
£13 billion spent on business rates relief
Business rates have been a contentious issue for small businesses for many years, but during Covid-19 relief has been more forthcoming. To date, £13 billion has been spent on those sectors most vulnerable to escalating bills.
Could coronavirus cost the UK £300 billion?
The Office for Budget Responsibility estimates that the cost of coronavirus for this financial year could be £298 billion. This figure combines the cost of all of the various relief packages, including the furlough scheme.
It's an almost unthinkable amount of money, but a lot depends on how businesses and customers respond over the coming months. If infections continue to fall, consumer confidence could return and the economy could re-boot. But a second wave of infections could of course make the situation even worse.
For now, these figures show that government support has been gratefully received by UK businesses. And if you haven't yet examined all of the support on offer, make sure you visit the government's official support page.