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Covid-19 estimated to cost food and drink SMEs £21k each

Published:  07 July, 2020

New research has estimated that small hospitality businesses operating in food and drink will on average lose £21,586 in lost work, earnings and loan repayments as a result of Covid-19.

Moreover, over half (55%) said they fear their business is at risk of permanently closing, according to the research by small business insurer Simply Business, which analysed over 250 small businesses operating in food and drink within the hospitality industry. 

One tenth said they believe they’re likely to close within three to six months, over a tenth within six months to a year, and another tenth within the next three months. 

Looking ahead, the study also revealed how SMEs within food and beverage feel about life after the pandemic, with just over half (52%) worrying about losing customers and their jobs.

In addition, one third (35%) said they are also concerned about running out of money, with one in three (32%) admitting they have had to borrow money from friends and family to keep afloat. 

“Few small businesses have been hit as hard as those in the hospitality industry, and it's clear that many will take time to recover. Small business owners and the self-employed have shown how creative, determined and resilient they are throughout the pandemic, and we know they’re going to be crucial as the UK economy looks to bounce back,” said Alan Thomas, UK CEO at Simply Business.  

The study also found that seven out of 10 (71%) have been able to apply for government grants, loans and schemes, with over a third (36%) having felt “particularly supported”.

Only one quarter (24%), however, feel "fully supported” and just over the same amount (28%) have felt “no support at all”.

Simply Business has launched a free Financial Support Checker to help small businesses, landlords and the self-employed to quickly determine what financial support and schemes are available to them during the coronavirus pandemic.