Loan payment holidays are the most common mitigation measure being used by small businesses to help sustain cashflow during the pandemic, a new survey has found.
Research from Purbeck Insurance Services, which provides personal guarantee insurance to small businesses, found that 46 per cent of its policyholders are taking steps to manage their cashflow.
Loan payment holidays were the most popular tactic, used by 47 per cent of small business owners surveyed, followed by HMRC deferral (25 per cent). The government’s coronavirus business interruption loan scheme (CBILS) was cited by 19 per cent of respondents.
“Our data shows many small businesses have been proactive and agreed payment holidays with lenders rather than using new loan facilities,” said Todd Davison, managing director of Purbeck.
“We believe this is largely down to a reluctance to take on more debt, although access to the CBILS has been difficult.
“We welcome the launch of the new bounce back scheme but businesses that have accumulated losses of more than 50 per cent of their issued share capital as at 31 December 2019 won’t be eligible, putting some high-growth businesses that have been trading for more than 3 years out of scope, although they may be eligible for the future fund scheme.”
Purbeck has launched a free online guide to the support packages and measures small businesses can consider during the Covid-19 pandemic and beyond.
“We are speaking to small business owners every day, talking through their options and supporting them through this hugely stressful period,” said Davison.
“We estimate that around half a million small business owners in the UK are acting as personal guarantors for business loans with their home, life-savings and livelihoods now at high risk.
“The guide is intended to summarise all the measures introduced by the government to date and will be updated on an on-going basis as and when further measures are introduced to limit the adverse impacts of Covid-19 on small businesses.”