Every fifth SME reports war-related losses of more than $100,000

16/ 08/ 2022

In recent months, losses suffered by small and medium-sized businesses as a result of the war have increased significantly. Thus, 27% of small entrepreneurs surveyed by the European Business Association estimate their losses to be from up to 10 thousand dollars, 28% – in the range of 10-50 thousand, another 13% – in the range of 50-100 thousand, and 20% – more than 100 thousand, which in one and a half times more than in May. Only 5% of entrepreneurs report no losses. These are the results of the fourth wave of the survey conducted by the EBA among SMEs - participants of the Unlimit Ukraine project. Thus, 22% of the businesses we surveyed report damage to property or assets directly as a result of hostilities. Of these, 23% are currently at the stage of fixing losses, and 11% have turned to law enforcement agencies to fix that. The other 63% did not take any actions aimed at fixing or compensating for losses as a result of hostilities. At the same time, 14% of companies report that they have offices or factories in the occupied territories. Almost a third of entrepreneurs, namely 28%, have resumed their work in full, 37% – partially, and 16% of SMEs are still not working. Compared to May, the number of companies that resumed full work increased as back then 21% of companies worked fully, 38% – partially, and 17% did not work at all. Among the idle businesses, 12% plan to reopen, and 4% may close soon. Small entrepreneurs assess their own financial stability as restrained. Currently, 27% report that their financial reserves will last several months, compared to 34% previously. Another 11% have reserves for one month, and the other 20% – for half a year. Only 6% have enough financial reserves for a year or more. The number of companies that exhausted their reserves slightly increased compared to May – from 29% to 32%. The SMEs capacity to pay wages improved slightly, but companies began to resort to layoffs more often. The number of companies forced to lay off employees increased by one and half times – from 12% to 18%. At the same time, the number of companies paying wages in full increased – from 23% to 34%. Another 25% of businesses have slightly cut their payouts, and only 15% are currently unable to pay their employees. Despite the difficulties, entrepreneurs continue to support the Armed Forces and provide humanitarian aid. To date, more than half of the companies, namely 53%, continue to help with finances, 19% – with products and services, 4% – with medicines, and 3% – with means of protection/defense. Another 11% of companies support employees currently defending the country. At the same time, 63% of respondents did not use either state or international programs to support their business. While 16% used the option of paying a single 2% tax, 6% – other tax benefits, 5% – the 5-7-9 credit program, and 1% – compensation for employment of IDPs. The majority of entrepreneurs did not resort to relocation – only 5% reported that they had moved abroad, and another 4% within Ukraine. Besides, 5% of interviewed entrepreneurs reported that they use international financial aid programs. We also asked whether small businesses plan to participate in the governments eRobota grant program – and 3% reported that they had already applied for it. Entrepreneurs plan to use the grant funds, in particular, to expand their business, purchase equipment, increase power supply capacity, etc. For reference: The survey was conducted from August 4 to 10 among individual entrepreneurs who are participants in the Unlimit Ukraine by the EBA. The project aims at supporting small and medium-sized businesses. Altogether, 118 entrepreneurs took part in the survey.

In recent months, losses suffered by small and medium-sized businesses as a result of the war have increased significantly. Thus, 27% of small entrepreneurs surveyed by the European Business Association estimate their losses to be from up to 10 thousand dollars, 28% – in the range of 10-50 thousand, another 13% – in the range of 50-100 thousand, and 20% – more than 100 thousand, which in one and a half times more than in May. Only 5% of entrepreneurs report no losses.

These are the results of the fourth wave of the survey conducted by the EBA among SMEs – participants of the Unlimit Ukraine project. Thus, 22% of the businesses we surveyed report damage to property or assets directly as a result of hostilities. Of these, 23% are currently at the stage of fixing losses, and 11% have turned to law enforcement agencies to fix that. The other 63% did not take any actions aimed at fixing or compensating for losses as a result of hostilities. At the same time, 14% of companies report that they have offices or factories in the occupied territories.

Almost a third of entrepreneurs, namely 28%, have resumed their work in full, 37% – partially, and 16% of SMEs are still not working. Compared to May, the number of companies that resumed full work increased as back then 21% of companies worked fully, 38% – partially, and 17% did not work at all. Among the idle businesses, 12% plan to reopen, and 4% may close soon.

Small entrepreneurs assess their own financial stability as restrained. Currently, 27% report that their financial reserves will last several months, compared to 34% previously. Another 11% have reserves for one month, and the other 20% – for half a year. Only 6% have enough financial reserves for a year or more. The number of companies that exhausted their reserves slightly increased compared to May – from 29% to 32%.

The SMEs’ capacity to pay wages improved slightly, but companies began to resort to layoffs more often. The number of companies forced to lay off employees increased by one and half times – from 12% to 18%. At the same time, the number of companies paying wages in full increased – from 23% to 34%. Another 25% of businesses have slightly cut their payouts, and only 15% are currently unable to pay their employees.

Despite the difficulties, entrepreneurs continue to support the Armed Forces and provide humanitarian aid. To date, more than half of the companies, namely 53%, continue to help with finances, 19% – with products and services, 4% – with medicines, and 3% – with means of protection/defense. Another 11% of companies support employees currently defending the country.

At the same time, 63% of respondents did not use either state or international programs to support their business. While 16% used the option of paying a single 2% tax, 6% – other tax benefits, 5% – the 5-7-9 credit program, and 1% – compensation for employment of IDPs. The majority of entrepreneurs did not resort to relocation – only 5% reported that they had moved abroad, and another 4% within Ukraine.

Besides, 5% of interviewed entrepreneurs reported that they use international financial aid programs. We also asked whether small businesses plan to participate in the government’s eRobota grant program – and 3% reported that they had already applied for it. Entrepreneurs plan to use the grant funds, in particular, to expand their business, purchase equipment, increase power supply capacity, etc.

For reference:

The survey was conducted from August 4 to 10 among individual entrepreneurs who are participants in the Unlimit Ukraine by the EBA. The project aims at supporting small and medium-sized businesses. Altogether, 118 entrepreneurs took part in the survey.