Barclays has pumped £21.4 billion into the economy through the various government-led loan schemes such as BBLS and CBILS.
The bank viewed data by the UK Business coronavirus data tracker by Savanta to see how SMEs were spending their loans and found that:
Half are using the funds to pay suppliers, followed by rent for premises (35 per cent) and topping-up the wages of furloughed staff (33 per cent). This indicates just how important the money has been in keeping operations running during Lockdown.
While loans have been used to maintain operations, there are also suggestions that the money is helping to fuel a recovery, with 29 per cent of businesses reporting a percentage of funds used to bring staff back into work, and just over one in ten investing in upgrading equipment and machinery
Small businesses were also asked about their investment plans going forward. Over a quarter said they will increase spend on product development, over and above pre-crisis levels; and 15 per cent will invest more in automated technologies to boost their productivity.
Nearly a third also said that they will increase spend on marketing.
In response to pressure on SMEs to diversify and pivot their business models, Barclays has partnered with Cambridge Judge Business School to offer a ‘Back to Business’ toolkit to help them assess the overall health of their company and create a tailored resilience plan.
Hannah Bernard, Head of Barclays Business Banking said: “SMEs are the backbone of the UK economy and their ability and creativity to do business at this time is driving innovation in the sectors they operate. They’re looking ahead and thinking about how to boost their profits through investment in technology and marketing.”