• Register
Return to: Home > News > CFN: 20% of UK SMEs set to collapse within the next two weeks

CFN: 20% of UK SMEs set to collapse within the next two weeks

Research conducted by the Corporate Finance Network (CFN) predicts that as a result of the Covid-19 lockdown, out of 10,000 of their SME clients, 20% will ‘probably’ or ‘definitely’ run out of cash in the next two weeks.

According to the research, 0.4% of those businesses have already closed down permanently.

The research also predicts that 26% of all SMEs will not be able to survive a further lockdown of four weeks, despite the overhaul of the emergency loan scheme by the UK Government.

CFN founder Kirsty McGregor has urged UK Chancellor Rishi Sunak and the treasury to announce additional and alternative solutions to protect these businesses.

McGregor said: “When the Chancellor said on 17th March that he would do ‘whatever it takes’ and that businesses should not make any hasty decisions, most business owners trusted him. However, three weeks have now passed and millions of these businesses don’t feel supported, and are having to make judgements about what to do next to protect themselves and their family from personal ruin and potentially ‘wrongful trading’ claims against them, which if found true, can bring disqualification and even a prison sentence.

 “Every business is, understandably, under incredible pressure right now, and some business owners don’t want to have that responsibility any longer.

“We have suggested some additional solutions which have been passed to the Treasury, which can focus on protecting the employees of the failing businesses and support the stronger businesses. We urge the Treasury to make some swift decisions because these business owners do not have the luxury of being able to be patient.”

The Association of Chartered Certified Accountants (ACCA) has agreed to update the research of the CFN through its wider membership of practising accountants. This will enable this barometer of SME health to become a weekly report which can be used by the UK Government.

ACCA UK head Claire Bennison said: “We’re pleased to be working with The CFN on this research drawing from the accountants and advisers who are working hard to support them access available support. We already know from our ACCA members that the biggest need right now for SMEs is the speed of this support. Things are moving very fast for this embattled sector, and practical policies and solutions need to keep pace.”

Top Content

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more

    FASB: a quest for simpler standards

    FASB chair Russell Golden addressed the IMA 2019 Annual Conference and Expo at the Sheraton San Diego Hotel and Marina, California, on 18 June. IMA immediate former chair-emeritus Alex Eng acted as moderator. Joe Pickard reports.

    read more

    The future of audit, and how to get there

    Two recent reports peer into the future of the audit profession. One analyses what an audit should offer, while the other looks at how the audit process will be carried out. Robin Amlôt takes a closer look at both.

    read more

    EFAA elects new president, focuses on digital future

    EFAA’s new president, Salvador Marin, outlined his key priorities for the next two years at the organisation’s 2019 annual general meeting, while outgoing president Bodo Richardt offered advice. Robin Amlôt reports.

    read more

    CORONAVIRUS TIMELINE: REACTIONS FROM THE ACCOUNTANCY PROFESSION

    As the Coronavirus (COVID-19) continues to spread across the world, the International Accounting Bulletin and The Accountant will be collating all the latest news and updates from the profession on the pandemic’s impact.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.