SMEs previously struggling with COVID-19 restrictions improving gradually

Real Business Rescue reveals an almost 10% improvement in SMEs in significant distress following the easing of COVID-19 restrictions.

Following the easing of national lockdown restrictions in April, Real Business Rescue have released their quarterly Business Distress Index for Q2 (April - June 2020), uncovering a post-pandemic health check on SMEs in the UK.

Small to medium-sized businesses (SMEs) across England and Wales are fighting back after COVID-19 lockdowns, according to the latest Business Distress Index from Real Business Rescue. New data from the Q2 insolvency and business distress report – which focuses on the three-month period April to June 2021, demonstrates a real change for most UK SMEs following the easing of the national lockdown restrictions in April. 

69,500 SMEs moved out of significant distress in Q2

Many businesses reopened their doors in April 2021, which seems to have had a positive impact on the number of SMEs in significant distress with an almost 10% (9.75%) decrease since Q1. Standing at 643,500 SMEs in distress in Q2 – 69,500 fewer than Q1 – this is the first quarterly decrease seen since before the pandemic hit the UK in early 2020. 

However, the Q2 figures also represent a bittersweet picture with business insolvency on the rise. In total, there were 3,116 company insolvencies in Q2, representing a 31% increase versus Q1 figures (2,371 insolvencies) – the highest quarterly insolvency figure since before the pandemic began. 

The regions that have seen the biggest reduction in SME distress following the easing of COVID-19 restrictions

Despite the rise in insolvencies, the overall picture is positive with 69,500 SMEs out of significant distress and decreasing levels of regional distress. In fact, since many UK businesses reopened in April, the report shows a drop in significant distress across all regions in the UK. 

Top seven SME jobs in danger

Despite there still being 3 million SME jobs in danger in the UK, the data shows a 6% decrease since Q1 where 3.2 million SME jobs were at risk. The lockdown easing has played a major part in helping to stabilise the UK economy, but certain sectors have benefitted more than others. 

Manufacturing has seen the biggest improvement, with a 9.8% decrease in jobs in danger compared to Q1. Whilst support services saw an 8% decrease, they have the highest number of SME jobs in danger at 518,288 in Q2. 

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Real Business Rescue

If your business is facing financial difficulties, it can be hard to know what to do and where to turn. At Real Business Rescue, we specialise in helping company directors navigate this minefield.  We have a team of professionals who have seen pretty much all there is to see in terms of business problems.

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