New research by the Bank of England shows that a third of small firms in the UK are facing heavy levels of debt following the pandemic, which is more than twice the pre-Covid-19 figure.

It is stating that it anticipates a significant increase in the number of these companies that go under during the next 12 months, due to a combination of the debts and the end of the restrictions preventing landlords from applying for winding up orders for firms that cannot meet rental costs.

The figures come from the latest quarterly financial stability report issued by the Bank of England, and this report also states that a lot of the smaller firms facing impossible debts are first-time borrowers that would not have qualified for a loan in the climate before the pandemic.

One possibility for those that now find themselves in this situation is to speak to professional accountants in Goole or elsewhere, as they may be able to help with debt management plans.

According to the report, business debt rose by £79 billion in the period from late 2019 to this year’s first quarter, with small to medium-sized enterprises (SMEs) making up two thirds of that. The sum is mainly accounted for by the various emergency loan schemes set up by the government, and that smaller companies made greater use of than others.

A third of these smaller firms now have debts totalling over 10 times their existing cash reserves, whereas before the pandemic happened, just 14% of UK SMEs were in that position.