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Building back business

Tackling small business debt in the wake of Covid-19

The Coronavirus pandemic has had a profound impact upon the businesses, income and finances of many self-employed people and small business owners across the UK.

Our new report  Building back business: Tackling small business debt in the wake of Covid-19 explores the experiences of callers to our Business Debtline service and makes the case for continued support from Government, regulators and creditors to those still struggling.

Based on findings from a survey of callers to Business Debtline, our report shows that a year and a half on from the initial outbreak, and the financial shocks it brought with it, many self-employed people are feeling some sense of a slow return to normality. For others, however, recovery has been more difficult. For people whose businesses are continue to struggle, repaying debts accrued during the outbreak is becoming more of a worry. For those already experiencing problem debt when Covid-19 hit, these challenges are particularly acute.

Read the report
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Key findings

Our research shows that:

  • Many of the people surveyed are facing an increasing burden of debt due to the outbreak.
  • 55% of Business Debtline callers surveyed had fallen behind on one or more household bill as a direct result of the outbreak. 62% had fallen behind on one or more business bill.
  • Eight in ten (79%) small business owners surveyed regularly lost sleep, with 78% reporting worried about their business’ future
  • Almost half of those who had taken out a Bounce Back Loan (48%) said that they were due to make repayments but had not been able to afford to do so.

Our recommendations

With self-employed people estimated to have contributed £316 billion to the UK economy last year alone, continued support is needed from Government, regulators and creditors to aid their recovery. This report sets out a number of key recommendations, which include:

  • Calling on the Government to work with the British Business Bank and lenders to ensure a fair and affordable approach to recovering Bounce Back Loans.
  • Urging creditors to offer specific forbearance to self-employed people struggling to repay Covid-related debts.
  • A call for the Department for Work and Pensions to review the support available to self-employed people on the lowest incomes, including reviewing the Minimum Income Floor in Universal Credit
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Latest research and reports

The Money Advice Trust is committed to a programme of research which enhances understanding of the debt and credit environment and practically improves money advice. Find all of our latest research and reports here.