It is expected that £27.2bn of loans will be written off, according to the ONS.
Purbeck Personal Guarantee Insurance is cautioning the 59% of businesses revealed to have borrowed more than 20% of their turnover over the pandemic to calculate their repayments, as they may be facing insolvency.
The firm calculated that interest on the average personal guarantee backed CBIL loan, £766,000, could come to £144,000 at 7% interest to £327k at 15% interest.
Todd Davison, managing director at Purbeck Personal Guarantee Insurance, said: “A company is deemed insolvent when it can’t pay bills when they become due, or it has more liabilities than assets on its balance sheet.
“With some businesses seeing sales driven down by as much as 50% during the pandemic, reports suggest the number of insolvencies could potentially be even higher than at the height of the global financial crisis back in 2009.”
He added: “It is critical that businesses look ahead at the loan repayments they will need to make, watch for the insolvency warning signs and seek expert advice on next steps such as turnaround finance; refinancing; Time to Pay; Company Voluntary Arrangements or Administration.”