Fears Covid-19 could claim 40% of Cornish businesses

5 minute read
Fears Covid-19 could claim 40% of Cornish businesses

Published at 6:01am 24th April 2020. (Updated at 3:08pm 24th April 2020)

Written by Richard Whitehouse, Local Democracy Reporter

There are fears that 40% of all businesses in Cornwall could fail this year unless the coronavirus lockdown ends by June.

That was the stark warning from the chief executive of Cornwall Chamber of Commerce about the current situation for companies in the Duchy.

Kim Conchie said: “If this thing isn’t over by the end of May or early June at the very latest and people can see that we will get some summer season then 40% of our businesses will fail this year. That will take decades to recover.”

The Chamber boss said that while business grants from the government were now filtering through to companies and helping to keep them afloat there was a need for planning to start for how firms will recover once restrictions are lifted.

He said that work was starting on lobbying the government now to make sure that they are prepared to help businesses so that they can “accelerate” their recovery.

“The grants so far have helped to ease the situation for businesses as the lockdown is now the norm for us all.

“But the ability for Cornwall to recover has a direct link with how long this thing goes on for.

“Businesses in hospitality and retail, many of them have had their small business grant of up to £25k and their rate relief as well – that has given them a little bit of cash.”

But he added that while this had helped a lot of businesses there were still major issues for firms all over Cornwall.

“I tried to think about how the large hotels are coping – something like the St Moritz Hotel, how do you mothball something of that size and ensure that it is ready to reopen when allowed with having no revenue coming in?

“If they are going to recover they will have not cash to buy supplies or pay workers.

“The government will have to make sure there is money available to help these businesses if they are going to recover.”

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Mr Conchie said that there were also problems for firms accessing the covid interruption loans which are being made available through banks.

He said that while there were some issues with banks being strict with the guidelines there were also problems with businesses not providing enough information to secure a loan.

He said: “Banks are nervous, if they just lend out money willy nilly and then the government looks at it in 18 months time and asks why they did this.

“The ones that have been successful have been the slightly larger businesses that probably have finance directors who can put together cash flow projections and plans which will help.

“The ones that are failing are the smaller businesses, the more vulnerable businesses, that can’t quickly put together a business plan.”

He added: “Banks are not going to pay out loans if they can’t be repaid over the six-year period.

“It is easy to paint the banks as the bad boys and they can sometimes be a bit slow to help and adapt, but in some cases it is the businesses going in unprepared.”

Mr Conchie said that he had not yet heard of any businesses in Cornwall which have been forced to close because of the current crisis, but said that it wasn’t something that you might hear about immediately.

However he said that he had had more conversations with businesses in Cornwall over the last four weeks than he usually does in a year and said that firms were grateful for the support that the chamber and Cornwall Council has been providing.

Looking ahead he said it was important that the government puts forward positive messages to help reassure businesses and customers.

He said: “One of the things that we are talking about with businesses is asking them to plan a few scenarios and what the future will look like and what your business might do in various scenarios – the government should be doing the same thing, painting a picture for businesses and their employees.

“There is life beyond this and they need to be thinking about what loans and short term cash might be there to help businesses and what they can do to help businesses to accelerate out of this.”

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