The impact of the crisis is spreading from the most vulnerable businesses to more established businesses
Research being collated daily by Funding Xchange, the principal online platform appointed by the Government to help businesses declined for loans by their mainstream bank identify other lenders, is warning of a concerning trend that the financial impact of the Covid19 crisis is now hitting hitherto safe established businesses.
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 applicant businesses requesting less than £15,000.
It is now evident though that it is not just these businesses that are struggling.
In April, from data compiled by Funding Xchange, there is a clear swing towards the next tranche of businesses. These have been able to ride out the first few weeks but are now seeking cashflow support.
In April, up to half (47%) of businesses that have been referred to the Funding Xchange platform have traded for at least three years compared with just a third (34%) in March, indicating that there is now evidence of developing financial pressure within established businesses too.
To reinforce the concerns, those now applying have a higher level of turnover than those active during March, with half (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 nearly half (46%) of referred businesses have a higher quality credit score compared with just a third (32%) in March.
Notes to Editors:
Key data charts attached
For further data details, contact Katrin Herrling at: katrin.herrling@fundingxchange.co.uk. 07920596584