Grimsey Review calls for ‘write off’ £ 1.7bn Covid loan debt for independent retailers
// New Grimsey report shows borrowing for independent retailers via Bounce Back loans is estimated at Â£ 1.7bn
// Before the pandemic, borrowing figures stood at Â£ 483million
// This means independent retailers now owe four times as much as a year ago and were now at risk without government help.
Independent retailers face a ‘mountain of debt’ after taking out Covid support loans during the pandemic and now need government help to survive, according to an influential independent review.
According to the latest Grimsey report titled Against all odds, led by former Wickes and Iceland boss Bill Grimsey, small retailers and / or independents now owe four times more than a year ago.
The report also says pre-pandemic borrowing for independent retailers was Â£ 483million, with additional borrowing through Bounce Back loans estimated at Â£ 1.7bn.
The mountain of debt had skyrocketed because small stores coped with the Covid-19 pandemic by accepting government guaranteed loans that would not normally be granted, based on their finances.
The Grimsey review calls on the government to write off some of its debt and warned that without help, the UK would experience a new wave of store closings and job losses this fall.
âOur Main Street independents have seen a new appreciation during the lockdown,â Grimsey said.
âBut they were also forced to take out government guaranteed loans, which they would not normally have been able to get because their balance sheets did not allow them.
âNow they are struggling to deal with a mountain of debt and need help. “
He added: âBritain is at a crossroads and the pandemic has brought about sweeping changes that will mark a decisive break with a traditional high street model.
âBut we can’t get ourselves out of trouble. To unlock the potential of our main streets, we also need to focus on people, partnerships and communities.
âIt means protecting small businesses. This means supporting a new generation of digitally savvy entrepreneurs and making shopping streets a test bed for new thinking.
âAnd that means promoting high standards and regulating key industries such as hairdressing and beauty.
“Britain needs a social recovery to lock itself into an economic recovery and our shopping streets should lead by example.”
The Treasury said it was already providing additional support and flexibility in loan repayments.
The latest Grimsey report reviewed the published accounts of all UK independent businesses in the retail, service and hospitality sectors with total assets of Â£ 250,000 or less.
Last year, Grimsey said nearly half of retailers were at risk of “going bankrupt” even before the pandemic, but a boom in online shopping had sped up the process, adding that “the old Main Street is over.”
with PA wires
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