Record number of small businesses set to close this year

The group said more than 250,000 small businesses could be lost unless the government increases the support its offering throughout the Covid-19 pandemic.

The prediction is based on the FSB’s survey of its own members, which found 5% of small businesses expect to close this year. Scaled to the national level, it would mean 250,000 of the UK’s 5.9 million small businesses closing their doors for good.

FSB national chairman Mike Cherry said: “The development of business support measures has not kept pace with intensifying restrictions.

“As a result, we risk losing hundreds of thousands of great, ultimately viable small businesses this year, at huge cost to local communities and individual livelihoods.”

The FSB said it has submitted ideas to government on how best to support these businesses, including a support scheme for self-employed workers who are currently excluded from financial aid.

“Company directors, the newly self-employed, those in supply chains and those without commercial premises are still being left out in the cold,” Mr Cherry added.

The FSB also proposed a Directors Income Support Scheme, which would see directors paid a grant of £7,500 over a three month period. Currently, directors who draw dividends, rather than a salary, do not qualify for any support.