Monthly Archives: May 2020

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Nearly half of small businesses do not intend to repay government loans

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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

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Hot Business News Today

Businesses may have to cover insurance and pensions of furloughed staff

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Originally written by Timothy Adler on Small Business
Rishi Sunak could ask thousands of small businesses to cover national insurance and pension contributions of staff on furlough from August.
Earlier this month, announcing the Coronavirus Job Retention Scheme would be extended until the end of October, the chancellor said that businesses would have to share some of the cost with government.
>See also: Rishi Sunak extends job retention furlough scheme to October
According to Bloomberg, one idea under consideration is asking small businesses to share the pain by covering national insurance contributions and auto-enrollment pension contributions of furloughed staff.
Over a million businesses have furloughed staff through the CJRS, which covers up to 80 per cent of an employee’s wages capped at £2,500 per month.
The fear is that asking mothballed businesses to cover national insurance and pension contributions will only hasten the inevitable redundancies when people come out of furlough. The gloomy prognosis is that a million or so workers currently furloughed have already lost their jobs but are being kept on furlough ventilator support.
>See also: Government launches business Coronavirus Job Retention Scheme
The government has been paying 80 per cent of the wages of about eight million workers. CJRS has cost more than £11bn and

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