One in five SMEs are at risk of collapsing due to lack of cashflow in the next four weeks, new research by the Corporate Finance Network has revealed.

The study, which looked at 13,000 UK small businesses, has predicted that 18% of all SME’s will not be able to survive until the end of the month despite the Government’s support measures.

When faced with a potential three-month closure period, the research found that the number of businesses unable to maintain operations long term could reach 31%.

With some Government pay-outs including the furlough 80% subsidy unlikely to be released to businesses until the end of April, many operators have been struggling to secure more immediate support from banks and landlords in the form of loans or rent moratorium’s.

Two weeks ago, chancellor Rishi Sunak reassured small businesses that they would be able to access Coronavirus Business Interruption Loans (CBILs) of up to £5m, but many have found they are not eligible for the scheme.

Speaking at MCA’s online event The Conversation on Monday (30 March), UK Hospitality chief executive Kate Nicholls said that many businesses in the hospitality industry have found that they don’t qualify for either the CIBLs or the CFFF (the large loan guarantee scheme).

“About 85% of our businesses fall below the CCFF big loan guarantee scheme and above CBIL, the interest-free loans that the government is making available to businesses worth less than £45 million,” she said.

“Providing access for the ‘squeezed middle’ of companies that fall outside the scope of both of those government schemes and are having to fall back on bank lending facilities, is a top priority this week.”