The Money Advice Trust, the charity that runs Business Debtline, has welcomed the Chancellor’s extension of the government-backed Covid-19 business loan schemes but has called for greater clarity on what will happen where business owners cannot meet repayments.
Joanna Elson CBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said: “Today’s extension of the government backed Covid-19 business loan schemes is welcome and comes at a time when many businesses are facing an uncertain future. However, while these loans have provided much needed support, those who have already taken out loans and are worried about repaying, need certainty too.
“More than a quarter of self-employed people we surveyed in receipt of one of these loans said they were not confident they would be able to repay. The Government needs to be clear on what will happen to business owners who cannot meet their repayments. This needs to include ensuring that the approach taken to recover any loans is fair and affordable – a difficult financial situation should not be made worse by inappropriate collection tactics.
“More widely, the Government need to think about how to support those with unaffordable loans longer-term. A Student-Loan-style repayment scheme for small business owners who have taken out government-backed loans they can no longer afford to repay could be one option.”