What are the options for dealing with all the unsustainable company debt as a result of COVID-19?
How much money are we talking about?
March to July 2020 paid out £46 Billion loaned under CBILs, The Coronavirus Large Business Interruption Loan and Bounce Back Loan Schemes.
Plus
£30 Billion in Vat Deferred (so far).
Plus more between now and March
=
Total unsustainable debt by March 2021 expected to be £100 Billion.
A third of which would stem from government loan schemes
Who’s prepared this report?
TheCityUK who represent a number of UK financial and professional businesses – 50 firms, 200 individuals, some really big players.
How many jobs would be lost if action isn’t taken?
3 million, estimated
How many businesses will go to the wall if action isn’t taken?
About one third of the 2.3m businesses who have taken a CBILS or BBLS loan. To put that into context, there are about 4 million companies live at Companies House at any one time.
Where are these businesses?
Three quarters are outside of London
What’s the purpose of the report?
To find a restructuring solution that gives more businesses a chance of surviving, and reduce the call on the government’s guarantees to the banks
Where do I find this report?
Here’s a link to a 148 page report by TheCityUK.
Wow, just wow! This early exploration makes for frightening reading…