As businesses begin to reopen, Nucleus Commercial Finance has found that SME owners are having to spend on average £21,830 to fully reopen.
As businesses begin to reopen, research from Nucleus Commercial Finance has found that small to medium enterprise (SME) owners are having to spend on average £21,830 to fully reopen, with 21% planning on using personal savings to cover the costs.
SMEs have already reported an average loss of £251,471 (sole traders: £8,671, micro: £47,218, small: £364,128 and medium: £665,299) due to the impact COVID-19.
For businesses that have already reopened, implementing new health and safety measures was the biggest cost factor (44%).
This was followed by staff salaries (33%) and reconfiguring the layout of the space (26%).
Investing in new technology (28%) and introducing new contactless payment systems (22%) were noted as a significant concern for medium-sized businesses (51-249 employees) in particular.
Restarting rent payments was cited as a concern by 16% of respondents.
On average, SMEs were found to have £29,983 of cash reserves available.
Rather than approach a bank or an alternative lender to help with cash flow, 28% planned on using cash reserves in the bank, more than a quarter (27%) are considering using government support schemes, and a fifth (21%) plan on using personal savings.
Chirag Shah, CEO of Nucleus Commercial Finance, said: “The last few months have been a turbulent time for businesses both large and small across the country.
"Not only has the loss of income been devastating for many SMEs, but those businesses that are able to reopen in some capacity now face significant costs to ensure they can operate safely, putting a further strain on business finances.
“We need to help SMEs not only survive the current pandemic, but thrive in the future.
"As such, we, as an industry, need to highlight the role that finance can play in the short-term, but also to support longer-term business goals and help them future-proof their business.
“During these uncertain times, business owners should rest assured that there are options available, and it’s our duty as an industry to educate them on the benefits of external finance.
"Together, we can help build a better future for SMEs, ensuring they are equipped to tackle further challenges, boost performance, and ultimately stimulate our economy.”