London, Scotland and north east England small and medium sized enterprises (SMEs) will be the worst affected by coronavirus, according to new research.
That is the finding of the SME Confidence Report, which surveyed 3,700 SME owners across the UK to measure the impact of the pandemic.
The report, conducted by small business insurer Simply Business, found that in London the COVID-19 outbreak will cost SMEs £17,074 ($21,084) each, on average, in lost work, earnings and loan repayments.
This is £6,000 higher than SMEs based in the south west, and more than £5,000 higher than the national average of £11,779.
In Scotland, SMEs will be facing an average cost of £15,484 each whilst the north east faces the third highest average cost of £15,040 each.
Across the whole of the UK, the total cost of coronavirus to SMEs will exceed £69bn.
Average cost of coronavirus per small business, including lost work, earnings and loan repayments:
London – £17,074.36
Scotland – £15,483.65
North East England – £15,039.52
South East England – £12,753.44
Wales – £11,804.82
North West England – £11,494.86
The Midlands – £11,079.12
South West England – £10,989.60
Business confidence has been hardest hit in Scotland and the north west where almost half say their business is at risk of closure, according to the report.
Across the UK, an estimated 234,000 SMEs have already shut down, while two thirds have temporarily ceased trading.
The figures come as the Organisation for Economic Co-operation and Development (OECD) warned the UK is likely to be the hardest-hit by COVID-19 among major world economies, with the UK economy likely to fall by 11.5% in 2020.
ONS figures released on 12 June also showed the UK economy dropped a record 20.4% in April, far exceeding the downturn during the 2008-09 financial crisis.
Alan Thomas, UK CEO at Simply Business, said: “SMEs importance to the UK can’t be overstated – accounting for 99% of all British businesses and contributing over £2tn in combined turnover. Put simply, it’s essential for our economy that small business bounces back.”
But he said there were encouraging signs of recovery as companies remained resilient.
The report revealed that London was seeing the highest number of new start-ups, with 15% of SME owners planning to start a new business after lockdown, compared to the 9% average across the country.