Originally written by Timothy Adler on Small Business
Nearly half of small businesses that have taken out government emergency coronavirus loans do not intend to repay them.
Forty-three per cent of businesses that have taken out either Bounce Back Loans or Coronavirus Business Interruption Loans say they do not believe the government will chase the debt, or that they will be unable to repay the loan, according to the Business Banking Resolution Service.
Nearly 60 per cent of the 500 small businesses surveyed by the BBRS have accessed government-guaranteed loan schemes.
The Bounce Back Loans offer struggling small businesses up to £50,000 interest free for the first 12 months, with a low 2.5 per cent interest rate after that.
The Coronavirus Business Interruption Loan Scheme (CBILS) supports loans of up to £5m per small business.
>See also: Microbusiness £50,000 Bounce Back Loans – how they work
According to UKFinance, both schemes have lent £22bn of government-backed loans between them to almost half a million businesses.
Over £14bn has been handed out through Bounce Back loans, along with more than £7bn via the Coronavirus Business Interruption Loan Scheme which is aimed at slightly larger players and has stricter rules.
The BBRS survey raises the prospect of thousands of firms having to be