One last heave or the final straw for SMEs?
British business owners are about to face another bitter wave of hardship. With Freedom Day date delayed until at least July 19, no extension to the furlough scheme, and unlikely extension to business rates holiday, many SMEs might find themselves on the cliff edge by July. Will the Government provide additional security for financially battered businesses?
Business groups including the British Chamber of Commerce urged the Chancellor to keep the financial support measures following confirmation of the four-week delay of lockdown easing. As without then support, as many as 200,000 jobs are now at risk.
Turning the tap off
Over the next few weeks, SMEs, particularly those in the retail and hospitality sectors, may be hit with substantial costs. The mounting debt of the quarterly rent, Bounce Back loan repayments, 10% furlough cost contribution may tip some businesses over. The ban on commercial rent evictions and Covid-linked insolvencies remains in place, and it is scheduled to end on 25 March 2022.
Rising insolvency numbers
Newest monthly insolvency statistics show corporate insolvencies are on the rise. The number reached 1,011 in May, 7% higher than the insolvencies registered in the same month in the previous year (946 in May 2020). As it may be too early to see whether the trend continues, many business owners will now be considering their options when the support measures are withdrawn in the weeks and months ahead.
Bounce Back loan – lifeline or liability?
Soon, many directors will find that breaching their Bounce Back Loan terms could have severe consequences and make them subject to director disqualification for up to 15 years or even prosecution.
If you are unsure of your position in relation to an outstanding BBL and need help understanding your options, please don’t put it off. If you need advice, contact us today for a free chat on 0800 118 2948.
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