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| Version 1 | Version 2 |
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| Covid loan: 'It's more than I spend on fish a month" | Covid loan: 'It's more than I spend on fish a month" |
| (2 months later) | |
| Chef James Allcock says loan repayments are costing more than ingredients for his food business | Chef James Allcock says loan repayments are costing more than ingredients for his food business |
| James Allcock, chef and owner of The Pig and Whistle restaurant in Beverley took out a £45,000 Bounce Back Loan at the height of the Covid pandemic. | James Allcock, chef and owner of The Pig and Whistle restaurant in Beverley took out a £45,000 Bounce Back Loan at the height of the Covid pandemic. |
| He says repaying it has become a big drag on the business, costing "more than I spend on fish a month." | He says repaying it has become a big drag on the business, costing "more than I spend on fish a month." |
| The Federation for Small Businesses (FSB) says firms should be given more flexibility to pay back pandemic loans, with higher debts hampering investment. | The Federation for Small Businesses (FSB) says firms should be given more flexibility to pay back pandemic loans, with higher debts hampering investment. |
| The government said repayment holidays were an option. | The government said repayment holidays were an option. |
| A spokesperson for the government added that Pay As You Grow measures gave borrowers with Bounce Back Loans the option to repay their loan over a period of up to ten years. | A spokesperson for the government added that Pay As You Grow measures gave borrowers with Bounce Back Loans the option to repay their loan over a period of up to ten years. |
| The FSB's chairman Martin McTague says he would like those options to be extended to those with Coronavirus Business Interruption Loans too. | The FSB's chairman Martin McTague says he would like those options to be extended to those with Coronavirus Business Interruption Loans too. |
| Small shops face £1.7bn debt mountain | Small shops face £1.7bn debt mountain |
| He said repayment levels for loans were "strong", and that defaults were "lower than previously estimated". | He said repayment levels for loans were "strong", and that defaults were "lower than previously estimated". |
| But, Mr McTague warned that, "many small firms are being held back from growth and investment due to their higher debt levels." | But, Mr McTague warned that, "many small firms are being held back from growth and investment due to their higher debt levels." |
| James Allcock has already extended the term of his loan, and he paused repayments over Christmas. | James Allcock has already extended the term of his loan, and he paused repayments over Christmas. |
| He says that after a "disastrous" May, he's taken the last available option and switched to interest-only repayments for 6 months. | He says that after a "disastrous" May, he's taken the last available option and switched to interest-only repayments for 6 months. |
| After that, he says, there will be "nowhere to turn." | After that, he says, there will be "nowhere to turn." |
| With higher costs, staff shortages and customers with less money to spend, Mr Allcock says this period is even harder than the pandemic. | With higher costs, staff shortages and customers with less money to spend, Mr Allcock says this period is even harder than the pandemic. |
| "I don't take any more money than I did 4 years ago, but it's costing a lot more to do it," he says. | "I don't take any more money than I did 4 years ago, but it's costing a lot more to do it," he says. |
| The latest government figures show that just over 6% of Bounce Back Loans are in arrears, with around two thirds being paid back on schedule. However, nearly a third of borrowers have used at least one of the options available to spread out repayments. | The latest government figures show that just over 6% of Bounce Back Loans are in arrears, with around two thirds being paid back on schedule. However, nearly a third of borrowers have used at least one of the options available to spread out repayments. |
| "There's been no bounce back" | "There's been no bounce back" |
| But that is not possible for those who took out a Coronavirus Business Interruption Loan (CBIL), like Collette Osborne who runs Hairven, a salon in Nottingham. | But that is not possible for those who took out a Coronavirus Business Interruption Loan (CBIL), like Collette Osborne who runs Hairven, a salon in Nottingham. |
| Collette Osborne and Rishi Sunak | Collette Osborne and Rishi Sunak |
| She borrowed £250,000 in 2020 when lockdown stopped her trading. | She borrowed £250,000 in 2020 when lockdown stopped her trading. |
| She estimates her losses from the pandemic to be around £700,000. | She estimates her losses from the pandemic to be around £700,000. |
| CBILs were 80% backed by government, had low interest rates and did not have to be repaid for the first year. Collette was given six years to pay the money back. | CBILs were 80% backed by government, had low interest rates and did not have to be repaid for the first year. Collette was given six years to pay the money back. |
| "I expected to be able to trade my way out of this," she said, but extended Covid restrictions, an unregulated industry and a lack of consumer confidence has made it a struggle. | "I expected to be able to trade my way out of this," she said, but extended Covid restrictions, an unregulated industry and a lack of consumer confidence has made it a struggle. |
| "There's been no bounce back," she says. "I can't take people on, I can't train people, I can't invest." | "There's been no bounce back," she says. "I can't take people on, I can't train people, I can't invest." |
| Collette said she raised her concerns with Rishi Sunak when he visited her salon as chancellor last June. | Collette said she raised her concerns with Rishi Sunak when he visited her salon as chancellor last June. |
| "He promised to see through all my concerns - I'd like another meeting with him," she says. | "He promised to see through all my concerns - I'd like another meeting with him," she says. |
| Given the huge impact of the pandemic on the hair and beauty industry, Collette would like to see more flexibility when it comes to paying back the debt. | Given the huge impact of the pandemic on the hair and beauty industry, Collette would like to see more flexibility when it comes to paying back the debt. |
| "It should be repaid on profits - to give us a chance to grow," she says. | "It should be repaid on profits - to give us a chance to grow," she says. |
| "The wolves are at the door," she adds, "nobody gives you any space." | "The wolves are at the door," she adds, "nobody gives you any space." |
| The Money Advice Trust, who run a helpline for businesses struggling with debt, says data from a survey of more than 500 of their clients earlier this year found that over a third of them had a Bounce Back Loan. | The Money Advice Trust, who run a helpline for businesses struggling with debt, says data from a survey of more than 500 of their clients earlier this year found that over a third of them had a Bounce Back Loan. |
| "Of the people we help at Business Debtline, many are still dealing with the financial fall out of Covid-19," said their chief executive Joanna Elson. | "Of the people we help at Business Debtline, many are still dealing with the financial fall out of Covid-19," said their chief executive Joanna Elson. |
| "The current crisis has compounded these financial pressures further - and so it has never been more important to make sure small business owners access the free advice they need," she added. | "The current crisis has compounded these financial pressures further - and so it has never been more important to make sure small business owners access the free advice they need," she added. |
| "Costs have rocketed" | "Costs have rocketed" |
| Some are trying other ways to get themselves out of debt. | Some are trying other ways to get themselves out of debt. |
| Dave Hughes who runs the not-for-profit Hot Box music venue and community centre in Chelmsford has launched a crowdfunding campaign to try and save his business, after finding himself unable to make repayments on his £50,000 Bounce Back Loan. | Dave Hughes who runs the not-for-profit Hot Box music venue and community centre in Chelmsford has launched a crowdfunding campaign to try and save his business, after finding himself unable to make repayments on his £50,000 Bounce Back Loan. |
| Artists including Fat Boy Slim and Frank Turner have agreed to play gigs for free at the venue in order to help it survive. | Artists including Fat Boy Slim and Frank Turner have agreed to play gigs for free at the venue in order to help it survive. |
| "Before the pandemic, we were a debt free business," he says, "I'd never owned a credit card." | "Before the pandemic, we were a debt free business," he says, "I'd never owned a credit card." |
| Now, loans and accumulated unpaid rent and bills mean he has £90,000 of debt. | Now, loans and accumulated unpaid rent and bills mean he has £90,000 of debt. |
| "Trading is back up to where it was before Covid, and even better," he says, "but costs have rocketed." | "Trading is back up to where it was before Covid, and even better," he says, "but costs have rocketed." |
| Mr Hughes says he has not paid himself since last August, and is being pursued by those companies he owes money to. | Mr Hughes says he has not paid himself since last August, and is being pursued by those companies he owes money to. |
| "I didn't bring this on myself," he says, "but they chase you like you're a criminal." | "I didn't bring this on myself," he says, "but they chase you like you're a criminal." |
| Related Topics | Related Topics |
| Coronavirus lockdown measures | Coronavirus lockdown measures |
| Personal debt | Personal debt |
| UK economy | UK economy |
| Restaurants | Restaurants |
| Food | Food |
| Coronavirus |