The boss of the NatWest bank has warned businesses to think long and hard about taking on unsustainable levels of debt during the Covid-19 crisis.
Chief executive Alison Rose spoke to Business-Live to co-incide with her group’s rebrand from RBS to the better known NatWest name.
She warned that many companies – including those stuck in the extended Leicester lockdown – would find themselves with tough decisions to make in the next few months.
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Since the end of March 海角视频 lenders have supported some 1.1 million businesses with £47.9 billion of government-backed coronavirus loans.
Ms Rose said: “It’s a really difficult challenge and for a lot of businesses there are going to be very tough times ahead and not every business is going to survive.
“The earlier you engage with your bank to talk about what the issues are and how we can help, the better. We will provide as much help as we possibly can.
“What is critical is how quickly we can get the economy moving again and get people back to work, and get growth coming again as we come out of this virus.
“This economic cycle is very difficult to any other one because it’s been triggered by a health crisis.”
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The Government has said Leicester will stay in local lockdown until August 1 at the earliest to deal with a local spike in cases of Covid-19.
Non-essential stores are being allowed to reopen, though.
The Office of National Statistics has said the lockdown has claimed 650,000 jobs nationally with fears up to 3 million jobs could go as a result of companies unable to repay Covid-19 debts.
Ms Rose said businesses needed to think hard about taking on more debt than they can cope with.
She said: “My advice to business is to reach out and get as much support as you possibly can.
“Our business hub is full of advice and support and tutorials, information on how to manage cashflow, things to think about.
“I think in terms of any businesses that are struggling, talk to your relationship manager or call into our business call centre where the team can help guide you and give you any advice that you need.
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“We are providing a huge amount of support through the Government lending schemes which can be accessed digitally and are there to bridge people through the coronavirus period and the shutdown.
“I think any business needs to think very carefully about whether they want to take on more debt at this point because, with these Government schemes the businesses are 100 per cent liable for the debt that they take on.
“So although it is interest free, with no repayments for the first year, the business is going to be liable for that debt and there’s a huge amount of debt that has been put into the economy to bridge this period.
“I think if a business is worried about that they should speak to someone and see if that is the right thing for them or if there are other options that we can help them with - such as managing their working capital or cashflow, or capital repayment holidays.
Speaking as her bank’s parent group RBS was formerly renamed NatWest, Ms Rose said people being made redundant should consider support from their free Accelerator and Fintech Accelerator programmes to help them up their own companies.
She said: “That support network is there and we are very committed to enterprise. We made it very clear it is a core part of our strategy to help entrepreneurs.
“I think the key thing for anyone starting a business is getting the right sort of access to help and support.
“One thing we are keen to do is make people aware of the different types of grants they can get, the different access to angel investment and other types of support because actually for an entrepreneur starting out, often taking on a huge amount of bank debt is not the answer.
“There is other help out there.”
Ms Rose added: “The pandemic has been devastating for a number of sectors. The hard stop that effectively we have put the economy into, and then the restricted movement.
“Tourism and leisure, hotels, restaurants, retail, have really been at the forefront of the sectors taking a lot of the pain.
“A lot of support has gone in with the Government schemes and lending to help bridge this period.
“I think the critical point is as we open up parts of the economy and get things moving again giving people the confidence to move around and reopening those sectors in a safe way will absolutely bring things back.
“I do think the tourism industry will see more of a trend for staycations this summer.
“People are not travelling overseas as much, but I think you will see a resurgence of the local economy and local tourism and national tourism.”