Findings of techUK’s COVID-19 impact survey – second round

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TechUK | Apr 6, 2020

UK tech startups and covid 19 - Findings of techUK’s COVID-19 impact survey – second roundRead more about the results of techUK's second COVID-19 impact survey and our new national campaign 'Building The Future We Need'.

techUK is regularly taking the tech sector’s pulse as we move through the COVID-19 crisis to better understand how the pandemic is impacting the sector, access to Government support and how tech can contribute to the response.

This survey builds on an initial survey launched on 13 March 2020 – the results of which were published on 20 March and can be found here.

techUK received over 100 responses giving us a high-level snapshot of the impact on the sector. Importantly, 50% of those responding were from small business (less than 50 employees).

Impact of COVID-19

techUK wanted to understand how businesses had been impacted in the immediate and short-term as well look at anticipated impact in the months ahead.

The survey showed that lost income and lost productivity were the two issues of most concern to businesses, both in the short and long-term. Whilst only 6% of respondents felt a cessation of trading/doing business was a likely outcome in the short-term, this was a concern for nearly 30% of respondents if restrictions remained in place for a longer period.

See: The Intersection of Small Business, Tech and Our Financial Ecosystem is More Important Than Ever

Supply chain disruption is also noted by respondents as a concern both in the short and longer term, with 40% of respondents citing it as a concern. While the UK has not implemented any restrictions at borders and ports to date, members are anticipating a slow down as staffing levels are impacted (borders and customs officials), and this is being seen in third countries where our members operate.

It will be vital to ensure that essential goods, such as telecoms and IT equipment continue to be able to move quickly through the border during this period to maintain digital resilience.

Government support

The Government has responded to the crisis with an unprecedented package of financial support. The survey highlighted the Pay Retention Scheme in particular – which has been accessed by approx. 70% of all those who had made use of some form of Government assistance. Nevertheless, just over half of respondents techUK surveyed (51%) believed they would be ineligible for support from the Government showing more work needs to be done.

For example, the survey also flagged concerns techUK is hearing around liquidity and access to finance, particularly for SMEs (which form half of all respondents to this survey). The UK’s tech sector has long been a bright star in the UK economy, growing at six times the rate of the rest of the economy, accounting for 7.7% of UK GVA. It will be vital to the UK’s recovery as a whole that the sector is supported through this period of disruption and uncertainty.

See: First two fintechs added to coronavirus UK emergency loan scheme

The changes made to CBILS on 3 April to expand eligibility, including ending the ability for banks to ask for personal guarantees is welcome. However, it still does not address the needs of VC-backed companies who are struggling. techUK recommends a specific lifeline for VC-backed companies who remain ineligible for Government support to date.

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