At least 250,000 small firms are set to go out of business without further help, a new report has warned.

The Federation of Small Businesses (FSB) said its research showed that one in five smaller companies cut jobs in the three months to December, and one in seven expect to do so in the coming quarter.

A survey of 1,400 firms suggested a record number of small business owners were planning to close over the next year while exporters were feeling the strain as a new EU-UK trade deal beds in.

The proportion of small businesses forecasting a reduction in profitability for the coming quarter has "spiralled" over the past year to an all-time high of 58%, the report said.

Half of exporters expect international sales to drop in the next few months, up from a third this time last year, the study indicated.

FSB chairman Mike Cherry said the development of business support measures had not kept pace with intensifying restrictions caused by the coronavirus crisis.

READ MORE: Monday Interview: Historic Edinburgh jeweller presses on with £3m refurbishment

"As a result, we risk losing hundreds of thousands of great, ultimately viable small businesses this year, at huge cost to local communities and individual livelihoods.
"A record number say they plan to close over the next 12 months and they were saying that even before news of the latest lockdown came through.

"At the outset of the first national lockdown, the UK Government was bold. The support mechanisms put in place weren't perfect but they were an exceptionally good starting point. That's why it's so disappointing that it's met this second lockdown with a whimper.

"There are meaningful lifelines for retail, leisure and hospitality businesses, which are very welcome as far as they go, but this Government needs to realise that the small business community is much bigger than these three sectors.

"Company directors, the newly self-employed, those in supply chains and those without commercial premises are still being left out in the cold."

A Business Department spokesman said: "We understand these are extremely challenging circumstances for businesses, which is why we have put in place one of the most comprehensive and generous packages of business support in the world worth £280 billion.

"This includes a new one-off grant worth up to £9,000, VAT relief, various loan schemes, a business rates holiday as well as the extended furlough scheme."

HeraldScotland: Students in Glasgow pre-pandemic. Picture: Colin MearnsStudents in Glasgow pre-pandemic. Picture: Colin Mearns

Coronavirus lockdown: Students being asked not to return offered rent discount

A major UK student accommodation provider is offering students a 50 per cent rent discount for four weeks, in response to government lockdown measures to tackle the coronavirus pandemic.

READ MORE: Unite Students, which describes itself as the UK's largest owner, manager and developer of purpose-built student accommodation, says eligible students will be able to apply for a discount of 50% of their rent for a total of four weeks, to be credited in March.

JD Sports 'likely' to stay shut until Easter

JD Sports has said its UK stores are "likely" to be shut until at least Easter.

READ MORE: The sportswear retailer also said closures of its stores in other countries are "possible at any time" as it warned that Covid-19 continues to create an uncertain outlook. However, it said its profits for the current financial year will be "significantly ahead" of forecasts amid strong customer demand.

Sign up

You can now have the bulletin and the top business news stories sent direct to your email inbox twice-daily, and Business Week for the weekly round-up on Sunday:

https://www.heraldscotland.com/my/account/register/