Coronavirus: Small firms 'on knife-edge' amid crisis

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Many local firms in Scotland are on a "knife-edge" as a result of the coronavirus crisis, according to business leaders.

The Federation of Small Businesses (FSB) said firms needed to see "sustained help on offer" to avoid them "stalling" once the lockdown is eased.

Its comments followed an FSB survey of firms across the UK.

It suggested a third of small business owners fear they will not be able to reopen after the Covid-19 lockdown.

The FSB found more than half (53%) of Scottish firms who responded had been forced to close, compared with 41% across the UK as a whole.

The survey - which included 758 businesses from Scotland - included calls for government support and clear guidance on how and when they should reopen.

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Andrew McRae, FSB's Scotland policy chairman, said the survey showed that many small firms were worried about their future.

He said: "We're certain, however, that with the right help from government, bigger businesses and the general public, we can ensure these fears aren't realised.

"But this research does show that many local operators are on a knife-edge."

The survey indicated that about one-fifth of the businesses had failed, or were struggling, to make rent or mortgage repayments, due directly to the economic impact of the lockdown.

More than 70% of businesses asked said they had furloughed staff to aid their survival.

Furlough extension

On Tuesday, the FSB was among several Scottish business organisations to welcome the chancellor's announcement of an extension to the government's job retention scheme.

The move includes allowing furloughed workers to return to work part-time from August, with employers asked to pay a percentage of their salaries.

Mr McRae said: "When the time comes to begin to reopen, businesses won't be able to go from nought to 60 overnight.

"For many employers, they'll want to phase a return to test any new systems and to keep their staff safe.

"When the focus shifts from shutting down to reopening safely, Scottish businesses will want clear no-nonsense guidance from the powers that be.

"We'll need to see sustained help on offer to help firms avoid stalling on restart."