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Carried out by business lender MarketFinance, the survey was completed last month by 860 UK manufacturing businesses employing 1-249 staff. The majority (67%) had less than £50,000 cash and faced running out of money before the end of April if they do not receive urgent support.
Over half (51%) were interested in accessing funding from the Coronavirus Business Interruption Loan Scheme, which offers up to £5m over six years, with the first year interest-free. A third of those surveyed were seeking an average loan of £62,500, equivalent to £417m for the sector. Just 4% were seeking a £10,000 loan, 11% need £17,500 and a further 3% need £300,000. The total demand is £644m before the end of April, according to MarketFinance.
Manufacturers might also find support in the government’s Coronavirus Job Retention Scheme, which offers to pay 80% of furloughed employees’ wages, up to £2,500 per month.
The loan scheme and jobs scheme are “absolutely laudable”, said a spokesman for manufacturers’ organisation Make UK, which was not involved with the research, but he said both schemes need “tweaks” to ensure businesses can make the most of them.
“Clearly companies are under a significant amount of financial – particularly cash flow – strain, and the schemes the government has introduced have the potential to significantly help companies,” he said to Professional Engineering. “At the moment they still need work, in particular the detail of how they can be applied to companies, particularly the business interruption scheme. It’s delivered by the banks, not the government, and that needs the banks to play their part as well.”
Despite the severe disruption, many manufacturers have eagerly offered their services to help tackle the coronavirus crisis.
The Make UK spokesman said: “Many companies are still operating – perhaps not entirely normally – but they are still operating and we have seen some quite amazing examples of how companies are stepping up and innovating to help with the national effort… making parts for ventilators or PPE, or many types of medical equipment to support the NHS.”
MarketFinance CEO Anil Stocker said: “Manufacturers are in urgent need of support. All the industry indicators show orders are down and unlikely to recover much this year. They have been hit hard by the Covid-19 outbreak. A number of firms have had to shut their doors and some that remain open are pivoting to make products that support the national effort to contain the spread of the virus. It’s imperative that we back these businesses.”
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Content published by Professional Engineering does not necessarily represent the views of the Institution of Mechanical Engineers.