The pandemic has made one thing clear: in the end, we can only survive with the support and help of each other. 

Whether it's doctors in intensive care units, nurses, supermarket workers, bus drivers or security guards, in the end, it was thanks to those who took responsibility for their communities and did not give up when things got bad, that brought us through this crisis. 

We should also applaud those who fought day in, and day out from their home offices for their company’s survival. Although those at home were not at the forefront of the global health crisis, they must also be remembered for working hard to help support people’s livelihoods (whether that’s small or big businesses) throughout this period of uncertainty.

It continues to be a turbulent time for small-to-medium-sized-enterprises (SMEs). The Corporate Finance Network states that on the 4th of May, only 42% of them had access to cash for the next four weeks. Business owners have had to make some tough decisions, ranging from layoffs to applying for loans with unfavourable terms, or/and deferring tax payments. As a consequence, it was revealed that 83% of CEOs have been feeling more stressed and anxious as usual. These concerns were exacerbated by the burgeoning late payments problem and uncertainty around upcoming tax payments.

To save their company from bankruptcy and overcome a crisis that shook the UK's financial market to its core, many business owners have had to make many difficult decisions. This included putting staff on furlough (a term that was rarely, if ever used before the pandemic began) under the Coronavirus Job Retention Scheme (CJRS), introduced by Rishi Sunak on the 20th April 2020. This move did not only save many businesses but was also a welcomed alternative to redundancies from individuals.

As a small business ourselves, we empathise with business owners throughout this time. We are always eager to speak to small businesses to give them a voice, to better understand what more can be done to support them financially depending on different situations, and to understand how the current economy might make an impact on the financial services they receive (you can see our interviews with businesses using CBILS).

Finance Director, Nic Redfern of small business Know Your Money told us about his experience with the Coronavirus Job Retention Scheme.

Know Your Money is an independent financial comparison website launched in 2004. Its goal is to provide transparent comparisons for a wide range of financial products such as breakdown covers, loans, mortgages and business bank accounts.

How has your business been affected by Covid-19? 

Consumer lending has stopped overnight and it’s had a significant impact on revenue. Probably around 75% of our revenue disappeared over three or four days and we had to close our offices and send everyone home at the same time. It was a challenging time financially, but also the lack of ability to engage with people and talk to them about what is happening next was hard. 

What percentage of your staff have your furloughed and for how long? 

One third. For April, May and half of June. We brought everybody back last week.

Have you considered using the flexible furlough scheme? 

We considered it. We decided that it was in the best interest of the business to have the whole team together to work through the next phase. 

What is your opinion about flexible furlough in general? 

I think it's a good step. We potentially would have considered it. It's a shame that flexible furlough wasn't available earlier. There are some businesses where the initiative might have worked well. The option to send one-third of the company home and then have two-thirds of people doing all the work and another third of people isolated did not sit well with us. I know several people on our team were quite frustrated because they wanted to be able to help and feel like a part of the team again.

On the other hand, it's a lot more complicated to administer. There has been a lot of talk in the last week about people abusing the furlough scheme and it’s probably far harder to understand whether this abuse is happening if you have got a part-time furlough option where you can't tell when people are working, especially when they are working from home. 

But it's good that it's there, it means that some people can feel like they can contribute and they can get out of feeling isolated at home. It seems like a good plan! 

How have you found the process of applying to the CJRS? Was it quick and effective?

For us, absolutely. It went through as quickly as they said. The system was fairly well done and kept very simple. In the context of how simple it could have been made, they did a pretty good job! 

Has the Government done enough to support SMEs suffering under the economic impact of Covid-19?

I think it's hard to see how they could do more. Given the long-term costs and long-term consequences, there are always people who are falling through the gaps. I am sure it was extremely stressful for SMEs that were waiting for the self-employed scheme to come through. It would have been great if those schemes were upfront. We will have to accept that they moved very quickly to get things in place that are pretty extreme and required an awful lot of work to make happen. 

The world stopped and everyone stopped and the schemes have supported everybody stopping. The real challenge is now. This is the moment when the decisions get a lot harder, businesses have to work out how they respond in a new world.

We can already see that the loan schemes are available for another period of time, so, fortunately, businesses will have some time to use those. 

Previous economic downturns have triggered a business’s position meaning they have had to adapt and make their products more viable and scale. There are also new products that come along and fit within a market. Recognising that there are opportunities created by the climate and that there will be businesses who can grow and hopefully take on new people and create jobs, as well as businesses who will be struggling, is important. 

Now looking back on using the CJRS, what is your take on it?

It is not an easy decision and the consequences are very different for different people. We had some people who have been homeschooling, furloughing them has probably made their life easier in a tough time. But we got some people who live on their own and social contact through work is a really important part of their day and furloughing them was a lot harder for them. It was the right thing for us to do and it helped us wait until the market started moving again. Now we can look into areas that we can invest in and grow, whereas during the lockdown it was just not possible to do so. 

We’re happy to see that some businesses are bouncing back, but the reality is that many businesses are closing up shop due to the pandemic and consequent lockdown. 21,000 UK businesses collapsed in March according to the Financial Times. Hopefully, the economy will be capable of bouncing back from the repercussions of the Covid-19 pandemic and come back to life in the form of a V-shaped recovery.

More about the Coronavirus Job Retention Scheme

Initiatives such as the Coronavirus Job Retention Scheme have been essential in saving the economy from companies going bankrupt, severe job cuts and a financial crisis worse than the one coming our way. 

The Coronavirus Job Retention Scheme (CJRS), introduced by Rishi Sunak on the 20th April 2020, gives many SMEs the possibility to claim 80% of their staff's current salary while on furlough. As of June, over 9.3 million jobs from 1.1 million different employees have been placed on furlough under the CJRS.

The Government is estimated to have to spend £20.8 billion on the CJRS, with that figure expected to rise to £80 billion by October. Furthermore, the scheme has also been extended until the 31st of October to further protect businesses and their employees. 

Additionally, from the 1st of July, the government has introduced a more flexible approach. Companies can bring their employees back to work for flexible days and still claim under the CJRS.

We would welcome any feedback, questions and clarifications. If you are a small business who would like to tell us about your experiences, or a financial institution, government body or policymaker who would like to collaborate with us, then please email Lisa at lisa@tomatopay.co.uk.