The quagmire of an economic slowdown caused by the COVID-19 pandemic has begun to show its negative impact. It is expected that by the time this crisis passes, a number of small businesses would have faced their end. Top business leaders also revealed another consequence of this mass disruption: The downfall of several businesses will be inevitable, unless the government expands its rescue schemes.
Doors Seem to Be Closing on Traditional Businesses
As the coronavirus health crisis rages on, traditional businesses struggle to survive. The last resort — state grants — also seems to be failing as lenders approve less than half of the loan applications.
According to Carolyn Fairbairn, the director-general of the Confederation of British Industry (CBI), a lot of successful businesses would be pushed to the wall, if an extension of coronavirus business interruption loan scheme (CBILS) and another round of grants are not introduced soon.
The data released by banking lobby group UK Finance revealed that CBILS has delivered loans to 16,624 firms, which is only 40% of the 36,000 applications filed for a grant. Even though the approval rate has increased slowly, it has been a matter of concern that banks are unable to deliver money to the neediest businesses. Furthermore, a number of small and medium business owners feel that the existing mitigation strategy would not be able to get them out of the financial crisis.
Investors Looking Elsewhere
At the same time, cryptocurrencies are experiencing a massive influx of retail interest. A report highlighted that platforms like Kraken, OKex, Bitfinex, Paxful, and Luno have all seen a great increase in the number of new users since the beginning of the lockdown. Other than this, new user activity on the Bitcoin network has accelerated considerably. The net growth of entities has tripled over the past month — from approximately 6,000 to 17,000 new entities per day.
All of these developments point out a major disruption in the existing model of business and the establishment of a crypto-led world market.
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