With the recent business headlines, it’s hard to believe that SMEs will ever be able to pay back the Government-supported COVID-19 loans - but is this really the case? In this week’s blog post we’ll look at the facts - and decide whether it really is all doom and gloom for these businesses.
According to new research published by Nucleus Commercial Finance, two thirds (66%) of SME leaders who received financial support from the Government’s Covid loan schemes say it’s likely their business will default on the loan. This means that there are 2.3 million SMEs who anticipate never repaying their loan. That’s a big number.
With over half (51%) of SMEs receiving financial support through the loan schemes such as CBILS, BBLS and RLS, this equates to a huge amount of SMEs who are worried about having enough working capital to pay back their loans.
But this all begs the question of how SMEs can pay back these loans. There are many ways to improve a businesses cashflow, including reducing supplier costs, boosting prices, and offering discounts for early payment. However these can be difficult changes to make - especially during the current financial period.
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