75% of Scottish SMEs say they’re bouncing back after the pandemic

A SURVEY by alternative lender Capify has found small to medium-sized businesses in Scotland are bouncing back strongly as coronavirus restrictions continue to ease

50 per cent of SMEs say they’ve already hit or surpassed pre-Covid levels of turnover, with a further 25 per cent expecting to return within one year

The results also show alternative lenders are now being used to finance businesses just as much as traditional banks

75 per cent of SMEs in Scotland are making strong post-pandemic recoveries, according to a new study investigating the impact of Covid-19 on small businesses.

Just weeks on from the relaxation of restrictions on July 19th, 50 per cent say they have already hit or surpassed pre-Covid levels of turnover, with another 25 per cent expecting to achieve that within a year.

More than 250 SMEs were involved in the survey by alternative lender Capify, which also highlighted that 33 per cent of Scottish businesses adapted their business models in some way to survive during lockdown. Launching online sales (75 per cent) and adopting new services or products (50 per cent) were the two most popular answers.

The findings also made good reading for employment statistics, with 50 per cent of SMEs in Scotland growing their staff levels by 10 per cent, despite 80 per cent of respondents using the Coronavirus Job Retention Scheme (CJRS) at some point during the pandemic.

The second most popular Government-backed support used was the Bounce Back Loan Scheme (BBLS), which was taken up by 60 per cent of SMEs across the country.

And with the survey finding that one in three businesses expect to need finance during the next 12 months, John Rozenbroek, CFO/CCO at Capify says the need for a range of financial options to support the UK’s economic recovery is clear.

“It’s fantastic to see that the majority of Scottish businesses are enjoying strong performances following the easing of lockdown restrictions, with many reaping the rewards of adapting their business models during the pandemic,” he said.

“The CJRS and BBLS clearly played important roles in keeping SMEs ticking over, but it’s also important to note that many small businesses went without much government support, having fallen through the gaps of various support schemes.

“Alternative finance has played a huge part in propping up and supporting businesses through the challenges of the last 18 months, and our data show that as an industry, it is now being considered by SMEs just as much as traditional lending options like high street banks.”

Despite the easing of restrictions, Covid-19 continues to impact SMEs with 58 per cent of survey respondents saying uncertainty over the future will be their number one challenge during the next 12 months.

“There is still a long way to go on the road to recovery for SMEs, even following the end of financial support from the Government, which is why alternative lenders like ourselves will need to be working closely with them,” added John.

“SMEs make up an incredible 99 per cent of the UK’s business population, and have companies across so many sectors have proven their resilience repeatedly, so it’s crucial for the economic recovery that SMEs continue to grow and succeed.”

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