A majority of UK manufacturers have seen their order books halved in the last month, with many likely to run out of cash by the end of April if financing cannot be worked out, according to a survey by MarketFinance.
The survey findings underscore the precarious future faced by UK manufacturers as SMEs struggle to secure government-backed funds under the Coronavirus Business Interruption Loan Scheme (CBILS), which offers up to £5m interest-free for the first year, over six years.
The fintech business lender’s poll findings were based on a commissioned survey of 860 UK manufacturing businesses (who employ up to 249 staff) in March 2020.
“The poll found that over two thirds (68%) reported their order books have halved in the last 30 days. To compound matters, the majority (67%) have less than £50,000 cash and without any support will run out of money before the end of the month,” MarketFinance said.
“The poll also found that over half (51%) of manufacturers are interested in accessing funding through CBILS to shore up their business for the medium to long term. The majority (33%) of manufacturers are seeking an average loan of £62,500, equivalent to £417m for the sector. Just 4% were seeking a £10,000 loan, one in ten (11%) need £17,500 and a further 3% need £300,000,” MarketFinance reported.
“With March revenues halved and near term prospects looking uncertain, most manufacturers (64%) have revised down their order books for 2020 by 40-50%. They are seeking short term solutions to remedy finance concerns. They ranked a larger overdraft facility as first preference before seeking a business credit card and in third place, using invoice finance as a means to inject working capital into the business,” MarketFinance reported.
Anil Stocker, CEO at MarketFinance, said: “Manufacturers are in urgent need of support. All the industry indicators show orders are down and unlikely to recover much this year.
“They have been hit hard by the COVID-19 outbreak. A number of firms have had to shut their doors and some that remain open are pivoting to make products that support the national effort to contain the spread of the virus. It’s imperative that we back these businesses.”