The UK's small shop owners are facing mountains of debt

The pandemic has exacerbated financial debts forced onto many independent high street stores and retail companies. A ‘tsunami’ of new store closures in the next quarter could be possibe, unless the government intervenes. The grim statistics come from Mr Bill Grimsey, the former boss of Iceland, Wickes and Focus DIY.

According to Mr Grimsey, small shops have survived the pandemic by borrowing, but are now faced with the task of paying it back. “Our High Street independents have experienced a new-found appreciation during lockdown, but they’ve also been forced to take on government-backed loans, which they would not have normally been able to get because their balance sheets wouldn’t allow it. Now they are struggling to manage a mountain of debt and need help,” Grimsey told the BBC.

A review is calling for a government “forgiveness” scheme to write off such loans for viable small businesses.

A Treasury spokesperson said: “Our unprecedented 350 billion pound Covid support package has provided a lifeline to hundreds of thousands of businesses across the UK - through loans, grants, tax cuts, business rates holidays and the furlough scheme.

“The government has always been clear that Bounce Back Loans are loans to be repaid and that they may not be the right answer for all businesses.

“We’ve provided further support and flexibility to businesses that took out Bounce Back Loans by introducing the Pay as You Grow options, so that loan terms can be extended, monthly repayments reduced and a repayment holiday taken for up to six months.”