More than 60% of small businesses do not see the point in the current lockdown
According to the EBA express survey, 62% of small businesses consider that the introduction of strict restrictions in January does not make sense, 24% think that the measures are too strict, and only 14% consider them mild or adequate to the situation. The survey was conducted by the European Business Association among representatives of small and micro businesses – participants of the Unlimit Ukraine project.
Due to the reintroduction of the strict lockdown, 22% of entrepreneurs are looking for new opportunities to develop their business, another 22% are forced to send their employees on unpaid leave, 13% – cut wages, 10% – partially reduce staff, 9% – close business. Only 9% said they did not feel the impact of lockdown on their activities, and 15% of entrepreneurs were able to digitalize their business.
Also, we asked the entrepreneurs whether they had applied for state financial assistance in the amount of UAH 8,000. It turned out that only 36% of the surveyed entrepreneurs turned to the state for financial support.
Top 3 goals for which entrepreneurs plan to spend the received financial assistance:
- Payment of wages to employees;
- Rent payment;
- Payment of utility bills.
The majority of entrepreneurs to whom the assistance payment was confirmed, namely 33% received the funds a week after the successful submission of the application, another 19% – in two weeks or more, 13% – in 1-3 days. The other 35% of respondents are still waiting for the funds to arrive. However, only 3% of small entrepreneurs report that financial assistance in the amount of UAH 8,000 will compensate for their losses incurred during the lockdown, while 84% consider such funds insufficient.
Among those who did not receive assistance, the majority, namely 59%, failed because their businesses do not belong to the NACE categories which are eligible for financial support. Another 12% failed due to the fact that the entrepreneur has the FOP and employee status at the same time, 9% – due to technical problems with the Diia platform where applications were submitted. Other reasons include the shutdown of the business, non-payment of single social contributions in the last 3 months, or the fact that the FOP has just been registered.
As we can see, despite the difficult situation of small businesses due to the new lockdown, not all entrepreneurs are in a hurry to apply for the proposed assistance, as its size cannot compensate for losses incurred due to the closure or restriction of business activities. Entrepreneurs also complain about the unfairness of the established rules and restrictions, when some are forced to close and some continue to work.
The survey was conducted from January 11 to January 18, 2021, among the participants of the Unlimit Ukraine project. Altogether, 105 entrepreneurs (owners of small and medium businesses) participated in the survey.
Unlimit Ukraine is a small business and microbusiness development platform created on the basis of the European Business Association. The project provides comprehensive support for small and microbusiness through educational events and consultations, participation in special projects, diagnostics of business problems, and discussion of issues relevant to it. The participants of the project can be small and micro-businesses with the ownership of FOP without limitation of activities. Today, Unlimit Ukraine includes more than 2300 participants.
Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.