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How do businesses elaborate plans to pay off their debts?

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Leading UK
How do businesses elaborate plans to pay off their debts?

Although many have returned to work, there are still millions of workers on the Government-backed furlough scheme. This means the UK’s Debt Management Office (DMO) is working overtime in selling gilts, or government bonds, to pay the difference between what the government raises in taxes and spending to pay for the COVID-19 pandemic. This also means that businesses across the country are sitting down and working out how they are going to deal with their own individual debt crises.

The coronavirus pandemic is forcing the UK into a recession the likes of which have never been seen in peacetime. The Office for Budget Responsibility predict that the Chancellor, Rishi Sunak, may well need to borrow close to £300 billion in order to ‘balance the books’. The longer it takes to recover the economy, the more likely many further businesses will fall into significant debt just to survive, let alone continue trading.

So, what are businesses doing in order to pay off corporate debt and what plans are they putting into action? Any business owner knows that to grow, money needs to be invested. But in times like these, taking on significant loans to increase workspace, buy equipment and materials or, indeed, provide a marketing budget does not make business sense. First, any debts need to be paid off so that the revenue being generated can be refocused on business growth, instead of paying off debts.

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