SMEs are responding to the pandemic and lockdown in different ways. Almost a third (34%) of SMEs had ceased operations for a time, while the same proportion 35% say they had to lay off staff, and 38% closed parts of their business, either temporarily or permanently.
Returning to business post-lockdown
Over half (54%) of SMEs say social distancing measures have reduced their capacity to take on new business. In addition, 42 per cent of businesses have had to turn down new orders because they are unable to fill them.
Additional obstacles for SMEs attempting to secure new business include not having the working capital to buy raw materials (21%).
Financial Pressures
The survey findings reflect the significant financial pressure put on businesses as a result of the pandemic. Over four in five (83%) SMEs were not using external finance prior to the Covid-19 pandemic – however 66% of those now say they would be more likely to use it in the future.
Almost a quarter (24%) believe they will only be able to meet their business costs for the next 3-6 months, and nearly three-quarters (71%) say they won’t be able to maintain costs for more than 12 months.
Almost a third of those businesses surveyed (31%) said they have temporarily layoff staff to save costs.
Bad debts and late payments
Since the outbreak in Ireland, half of the SMEs surveyed have experienced bad debt, writing off an average of €75,000 . Over half (55%) of SMEs reported that customers were taking longer to pay than usual.