Business finance during the pandemic

ended 01. April 2021

At 09:30 this morning (sorry, tight deadline), UK Finance is publishing SME finance data for Q3 2020.

In Q2 of last year, borrowing levels jumped as SMEs took out Government-backed loans and the third quarter is likely to see that trend continue.

Many businesses will have taken out loans last year to make up for lost revenue, others because money was cheap and they saw an opportunity to invest.

In your experience, what impact will the increased loan burden have on SMEs in the short- to medium-term? Will it restrict growth or potentially ignite it?

Should the Government bump back loan repayment dates until such a point that SMEs can genuinely afford to pay them back?

1 responses from the Newspage community

We see two factors determining how SMEs cope with an increased loan burden: 1. their own financial strength and 2. the strength of sector specific recovery. Some businesses took out loans as a cash cushion and are ready to invest in their market comeback. Others who have used up their loans expect to balance loan repayments with getting cash into their business faster: invoice finance will celebrate a big moment this year. In the light of an extended lockdown, extending loan repayment terms has been a fair thing to do and will continue to ease the financial pressure on businesses in the coming months.