Loan payment holidays are the main mitigation measure being used by small businesses to help sustain cashflow during the COVID-19 pandemic according to a snapshot of the market by Purbeck Insurance Services.

46% of the insurance provider’s policyholders are taking measures to manage their cashflow with loan repayments the top tactic being used by 47%.  25% are using HMRC deferral and 19% are using the CBIL scheme.

Todd Davison, MD of Purbeck said “Our data shows many small businesses have been proactive and agreed payment holidays with lenders rather than using new loan facilities.  We believe this is largely down to a reluctance to take on more debt, although access to the CBIL scheme has been difficult.”

“We welcome the launch of the new bounce-back scheme but businesses that have accumulated losses of more than 50% 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.”

“We are speaking to small business owners every day, talking through their options and supporting them through this hugely stressful period.  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.”