UK businesses owed £133bn since lockdown, lender finds

As workplaces open again this month, fintech business lender, MarketFinance, found that UK businesses are owned £133 billion since lockdown.

According to the lender, nine in ten businesses are waiting to be paid an average of £148,917 for work done pre-lockdown, half of those that applied for CBILS loans have been declined and cash flow will be strained as invoices take longer to be settled.

Unsurprisingly, 85% of business owners have felt a sense of loss of control over the past 3 months.

With £148,917 still owed to them since March 2020, the vast majority of businesses (81%) are also expecting to wait longer to be paid for the goods they provide and work they do from now on.

Half anticipate waiting anywhere between 14-30 days beyond normal terms (45 days).  Whilst 15% reported they could be waiting anywhere between 3-6 months longer to be paid for work.

Only 43% of businesses that applied for a CBILS loan were successful in securing it. The typical loan taken by these businesses was £211,667, though they applied for almost double this amount.

“Businesses are facing a three-pronged assault on their finances,” said Anil Stocker, CEO at MarketFinance.

“First up, its alarming that only half of their CBILS loans are being granted, then we learn that they have close to £150,000 in outstanding payments since the lockdown began and now, it’s likely that they will have to wait twice as long to get paid for new work they do whilst demand and economic activity normalises.

“This coupled with a very moderate outlook for trading conditions, ‘rent quarter day’ this week and uncertainty about their workforce, no doubt this will put further pressure on businesses.”