Nearly half of small businesses asked in a poll are being forced to rely on savings to help stay afloat during the COVID-19 pandemic, according to a Hertfordshire Challenger Bank.
A survey carried out by Redwood Bank in May has shown that 48 per cent of senior executives and business owners say that money has been withdrawn from their business deposit savings accounts since the coronavirus crisis started.
A total of 17 per cent of respondents said they had taken out at least £10,000 and seven per cent admitted they had withdrawn more than £50,000. Based on the figures provided in the survey, the Bank has estimated the total value of these withdrawals could equate to around £22.4 billion across the country.
If the UK remains in partial lockdown, 23 per cent of businesses expect to withdraw more than £10,000 from their business savings, with nine per cent saying their withdrawal amount may tip over £50,000.
Gary Wilkinson, CEO and Co-Founder of Redwood Bank, said: “COVID-19 has had a significant impact on small and medium sized enterprises (SMEs) who rely on regular income and a healthy cash flow. As a result of the lockdown, many businesses have had to shut down their operations to adhere to Government guidelines, which has meant revenue has been cut dramatically, but unfortunately bills still need to be paid.
“With no or little income coming in, our findings show many businesses are desperately trying to stay afloat and have had to tap into their hard-earned savings to pay costs and keep going. With this happening, it’s vital that business owners ensure their savings work even harder for them.
“Redwood Bank understands this and remains committed to business savers, currently offering 1 per cent gross AER for its 95 Day Business Savings account.”
Despite the worldwide disruption that COVID-19 has caused, Redwood Bank continues to be open for business, with all its staff working from home, as recommended by the Government.
|Since the Coronavirus crisis started, how much money has your company/employer taken out of cash savings to help meet its costs?||Percentage of SME owners/senior managers/executives interviewed|
|Up to £1,000||5%|
|Between £1,001 and £5,000||9%|
|Between £5,001 and £10,000||5%|
|Between £10,001 and £50,000||10%|
|Between £50,001 and £100,000||4%|
|Over the next three months, because of the Coronavirus crisis, how much money do you think your company/employer will take out of cash savings to help meet its costs?||Percentage of SME owners/senior managers/executives interviewed|
|Up to £1,000||11%|
|Between £1,001 and £5,000||12%|
|Between £5,001 and £10,000||7%|
|Between £10,000 and £50,000||14%|
|Between £50,001 and £100,000||2%|
Being the first UK Business Challenger Bank to be completely ‘born in the cloud’ means that Redwood’s robust systems and processes are enabling service continuity with no disruption to any of its customers.
There are no plans to furlough any of Redwood’s staff members, and the Bank is helping customers who are adversely impacted by COVID-19, on a daily basis.