Growth expectations by UK small businesses plummeted from 39% in April to just 14% in Q1 2020, according to a recent survey by Hitachi Capital (UK) plc.

Hitachi’s quarterly tracking study of small businesses also found that in April, 31% of business owners were scaling back their businesses and 30% said they would struggle to survive between now and the end of June.

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The survey, carried out by YouGov, reveals the scale of the impact the Covid-19 pandemic has had on the UK SME sector.

Hitachi, who commissioned the study, said the poll was conducted among a representative sample of 1,266 small business decision-makers in April 2020.

The industry sectors where small business owners most feared would collapse were hospitality and leisure (50%), retail (40%) and transport/distribution (37%).

For the first time, every industry sector recorded more business leaders predicting contraction or collapse than growth for the next three months.

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Reflecting on their current trading status since the outbreak of the Covid-19 in the UK, 32% of small businesses respondents have temporarily closed, with just 1% so far closing permanently.

Further, 34% have adjusted to a home working regime, 12% have transitioned to become online businesses and 4% have diversified their services in order to stay afloat.

Around one in seven (13%) reported no change to their trading status.

The new data also revealed that the digital status of a business respondent before the pandemic had a direct bearing on how it now saw growth prospects for the period to the end of June.

Small businesses that were largely online at the start of the year were most likely to predict growth for the three-month period (28% compared to just 7% of offline businesses).

The current climate though has brought a sudden and seismic shift in confidence and outlook.

Many small businesses have been unable to trade and many are having to revise growth forecasts as the whole supply chain has been shaken by the current period of lock-down.

Hitachi Capital (UK) plc is a wholly-owned subsidiary of Hitachi Capital Corporation, one of Japan’s largest non-bank financial institutions and runs asset finance and invoice finance operations through its Hitachi Capital Business Finance division.

The company is an affiliate of both Hitachi Ltd, a world leader for manufacturing and technology, and Mitsubishi UFJ Financial Group Inc.