Publication: Peer2Peer Finance News
15th July 2020
The government-backed emergency coronavirus finance is only providing businesses with relief for three months, Funding Xchange claims.
Analysis by the business finance aggregator found 60 per cent of borrowers that come to its platform have insufficient free cashflow to repay bounce back loans.
It comes amid rumours that the chancellor Rishi Sunak will introduce some form of repayment flexibility.
“There is real urgency to resolving this issue,” Katrin Herrling, chief executive of Funding Xchange, said.
“The data we have collected from those businesses that took advantage of the coronavirus loans, but have subsequently applied through the Funding Xchange portal for further loans, indicates that, for many the government loans have provided enough relief for no more than three months.
“For this reason, it is critical that the chancellor's anticipated resolution is implemented right now.
“Without this, it is difficult to see new commercial lenders providing ongoing debt support for the businesses that have not yet started to return their trading to pre-Covid levels. It's very much a case of do it now or see many businesses die.”