Companies will have borrowed more than £60 billion to help them to survive the pandemic by the end of this year, according to forecasts that lay bare the precarious state of corporate Britain’s finances.
Net lending to non-financial firms jumped to £35.5 billion last year, from a net £8.8 billion in 2019, as companies tried to secure emergency government-guaranteed loans from banks, the EY Item Club has found.
The debt burden is set to rise still further. The EY Item Club forecast that bank lending to businesses including through the government schemes, would increase by 5.4 per cent this year, which equates to an extra £26 billion net of repayments, Many companies have had to borrow to shore up their finances during the Covid-19 outbreak.
-THE TIMES (UK)