Stats show that Covid-19 is affecting both vulnerable and established businesses
by Startacus Admin
Funding Xchange data reveals that the impact of the crisis is spreading from the most vulnerable businesses to more established businesses...
There is a concerning trend that the financial impact of the Covid19 crisis is now hitting hitherto safe established businesses according to research being undertaken by Funding Xchange, the online platform appointed by the Government to help businesses declined for loans by their mainstream bank identify other lenders.
In the first two weeks following the lock-down, vulnerable businesses were the predominant users of the referral process to access very small amounts of funding, with 7 out of 10 of those businesses requesting less than £15,000. However it is now evident that it is not just these businesses that are struggling.According to data collated by Funding Xchange, in April, there has been a clear swing towards the next tranche of businesses. These businesses have been able to ride out the first few weeks but are now seeking cashflow support.
In April, 47% of the businesses that have been referred to the Funding Xchange platform have traded for at least three years compared with just 34% in March, thereby indicating that there is now evidence of developing financial pressure within established businesses too. Also, those businesses now applying have a higher level of turnover than those active during March, with 47% turning over in excess of £100,000, an increase of 15% from March.
A similar trend is seen when looking at the credit quality of applicant businesses. In the first two weeks of April, 46% of referred businesses have a higher quality credit score compared with just 32% in March.
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Published on: 20th April 2020
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