Monthly Archives: September 2020

Hot Business News Today

Small businesses should ‘only repay coronavirus debt once back in profit’

by  •  • 0 Comments

Originally written by Timothy Adler on Small Business
Small businesses should only repay state-backed coronavirus debt once they are back in profit, a centre-right thinktank has argued.
The taxman could claw back emergency COVID-19 funding once businesses are back trading at a profit, argues Onward.
This would be through a surcharge on taxable profits and shareholder salaries, paying off your Bounce Back Loan or Coronavirus Business Interruption Loan.
>See also: Where to find your £1,000 small business lockdown grant
The issue is pressing because, according to the ONS, one in five small businesses are already “zombie” companies – meaning the annual cost of servicing their business debt equals their profits.
And nearly one in 20 firms (4.3 per cent) are technically insolvent with liabilities greater than their assets, due to the levels of debt they have already built up since March. These firms employ an estimated 1.8m workers.
Debt levels have leapt during this year’s lockdown as businesses tapped the government’s emergency loan schemes to meet costs, leaving many overburdened with debt. About £53bn has been loaned to small and medium-sized businesses finance industry lobby group The CityUK estimates that £35bn may not be repaid.
>See also: Lloyds rapped for forcing Bounce Back Loans borrowers to open accounts
The

Read more...

Hot Business News Today

MPs back call for ‘targeted’ extension of furlough scheme

by  •  • 0 Comments

Originally written by Timothy Adler on Small Business
MPs have urged Rishi Sunak to extend the taxpayer-funded furlough scheme businesses with a chance of surviving the coronavirus crisis.
The Chancellor should “show flexibility” and target companies that are still viable when the existing furlough scheme ends in October, members of the Treasury select committee said.
The committee said the Chancellor should “carefully consider” whether a targeted extension was needed for the furlough scheme, which has protected 9.6m jobs to date at a cost of £35bn. The scheme will be wound up at the end of October. Some 11 per cent of the British workforce were on partial or full furlough in mid-August, according to a survey published on Thursday by the Office for National Statistics.
>See also: Where to find your £1,000 small business lockdown grant
The cross-party select committee said in its report on the economic impact of the COVID-19 pandemic, published today, that a large proportion of businesses in the sectors most affected by social distancing might have a long-term future.
“The key will be assisting those businesses who, with additional support, can come through the crisis as sustainable enterprises, rather than focusing on those that will unfortunately just not be viable in the

Read more...