Sole traders – who account for 59 per cent of the business population – have been worst affected of all by Covid restrictions, according to the small business lender iwoca.
Just over half are trading less than they were before the pandemic, significantly more than limited companies. Their research also suggested they are twice as likely not to be trading at all, with 14 per cent of them in this position compared to seven per cent of their limited company counterparts.
As the UK reopened, small businesses report that having to be ‘Covid-secure’ took its toll; with sole traders suffering the biggest hit. Almost a third said they were making fewer sales due to such workplace measures, compared to only a quarter of limited companies. and significantly more reported having fewer customers.
But worst of all, nearly half of business owners with sole trader status were concerned they’d struggle to afford their own wages in the next six months.
We need them back on their feet – hopefully the lifting of restrictions will help
As SMEs continue to wrestle against the pandemic, time off seems to have become a luxury they can’t afford. And again, it’s sole traders who’re worst affected, with a quarter not even planning to take one day off in the next 12 months.
Seema Desai, iwoca COO, said: “The pandemic has hit sole traders particularly hard. We need them back on their feet – hopefully the lifting of restrictions will help them to recover, which will be great for them and also for the economy more broadly.”
The lender distributed nearly £400 million to small businesses through the Government’s Coronavirus Business Interruption Loan Scheme (CBILS) and in June 2020 launched iwocaPay – an online buy now pay later invoice checkout to help small businesses get paid.
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