The first set of figures from the Insolvency Service for Q1 of 2020 showed that both individual and company insolvencies decreased, and the number of individual bankruptcies rose. The figures largely pre-date the Government lockdown and wider impact of the Coronavirus (COVID-19).
But analysis going deeper into the crisis by the Enterprise Research Centre has warned of a “pincer movement” with a surge in limited companies going bust being mirrored by a drop in new firms setting up.
Ben Francis, FSB Wales Policy Chair said: “These figures just go to highlight the scale of the challenge that small businesses right across Wales are facing.
“For many of those in need, there is a package of support available. However, there are still a significant number of firms that are falling through the cracks and are currently unable to access any support – from UK or Welsh Government – in order to help their business survive the pandemic.
“Areas such as the bounce back loan scheme which will go live on Monday (4 May), must have applications processed as promised within 24 hours.
“Crucially, the Job Retention Scheme, which is helping to keep money in the pockets of employees while safeguarding the long term future of small businesses, is doing a robust job. But for certain sectors, the restrictions on gatherings and the scale of the lockdown will mean that some staff will face the possibility of furlough for a lengthy period.
“That is why Welsh and UK Governments must continue to constantly provide support until the crisis ends. There is still time to support those firms who otherwise risk struggling to make it through this period. The current review of the Economic Resilience Fund must look at how to pick up those firms that have not yet been eligible for support a such as areas of the self-employed community. In this, we’d like to see a replication in Wales of Scottish Government’s bursaries for the self-employed
“These are hugely worrying times for small businesses, and for many this is going to be a difficult period for much of the year. If we want to prevent more small firms who are the backbone of the Welsh economy, from going under, then the right support must always be available.”