Stable businesses must be encouraged to buy failing enterprises, says business woman

Kirsty McGregor, the founder of The Corporate Finance Network, believes stable firms can play a role in shoring up the economy by making acquisitions.

She said: "The issue is that we are not an acquisitive nation. SMEs rarely buy other businesses.

"There were less than 5,000 deals across the UK in the past three years involving SMEs (small and medium-sized enterprises) with less than £25m turnover. The natural course of business will not help this dire situation.

She added: "We need to do something which encourages maybe 250,000 businesses to make an acquisition of a failing business in their sector.

Ms McGregor said that local enterprise partnerships should be given more money or a tax incentive should be put in place with HMRC to help fund acquisitions.

She added: "I have providers for the operational logistics - with a matching database, of accountants and lawyers to run a very streamlined deal - packaged and it could be ready to launch in a week."

Ms McGregor quoted the owner of a firm in Suffolk, who said. "My initial thoughts are that it is going to be carnage for SMEs if businesses can’t get back working within six months, even with the Government support,. I can’t really understand why an instant boom is predicted once everything returns to normal though.

"All the deferred debt and loan payments, new credit payments, higher taxes and unemployment must surely reduce disposable incomes.”

The Chancellor Rishi Sunak recently announced an "unprecedented" package of support for workers and businesses to help them cope with the coronavirus pandemic.

Support for businesses already announced by the Chancellor includes providing £330 billion in business loans and guarantees, paying 80 per cent of the wages of furloughed workers for three months, VAT and tax deferrals, introducing cash grants of up to £25,000 for small business and covering the cost of statutory sick pay.