£36bn of government-backed loans will be toxic, taskforce warns

Industry News | 07/06/20

A report by the Recapitalisation Group has issued a stark warning over government loans to help businesses through the coronavirus crisis. Photograph: Matt Cardy/Getty Images
A City taskforce is warning that up to £36bn worth of government-backed business loans could turn toxic by next year, as companies struggle to repay growing debts during the Covid-19 crisis. An interim report by the Recapitalisation Group, led by EY and lobby group TheCityUK, projects that businesses will be saddled with £97bn-£107bn worth of unsustainable debt by March 2021. A third of that total will come from government-backed loans. It outlines a range of measures meant to support businesses and avoid using taxpayer money to cover unpaid debts if firms default on their loans.

Source: The Guardian