A survey has revealed that about 38 per cent startups have run out of funds and 30 per cent have 1-3 months of cash left, indicating the severe impact of lockdown on fledgling businesses.
According to the survey by Local Circles — which sought over 28,000 responses from more than 8,400 startups, SMEs and entrepreneurs — 16 per cent such entities said the they have 3-6 months of cash left.
Another 12 per cent respondents said they have less than a month’s worth of cash left.
“Four per cent also said that they have already shut down the business due to the lockdown effect,” the report noted.
LocalCircles’ report assesses the impact that COVID-19 pandemic and the following lockdown have had on the startups and SMEs of India.
“Many businesses have reported a revenue drop of more that 80-90 per cent in the last two months making it hard for them to even sustain their business,” it said. The comparison from April to June 2020 showed that percentage of startups and SMEs out of funds has risen from 27 per cent to 42 per cent, showing a worrisome situation, it added.