Ahead of the 31 March deadline for applications to the BBLS (Bounce Back Loan Scheme), the Association of Independent Professionals and the Self-Employed (IPSE) has praised the scheme for the help it provided for the self-employed – but also warned of a “rising tide” of debt in the sector.
IPSE research with Starling Bank suggests one in ten freelancers (10%) took out a Bounce Back Loan, while one in four (23%) took on credit card debt and one in seven (14%) had to go into their overdrafts to get by during the pandemic.
Andy Chamberlain, Director of Policy at IPSE said: “The BBLS has been a vital lifeline for many freelancers – and its generous repayment time is welcome. At the same time, however, government must pay close attention to a rising tide of debt in the self-employed sector.
“For many freelancers who could not access the Self-Employment Income Support Scheme (SEISS) – such as the newly self-employed and limited company directors – the BBLS was the only way to keep themselves afloat. And, as our research has shown, many others – particularly those who struggled with the tightening eligibility criteria for the scheme – have taken on major debt from traditional forms of borrowing such as credit cards and overdrafts.
“As the government prepares its Recovery Loan Scheme, we urge it closely monitor the level of debt in the sector – and not only ensure leniency from lenders, but also be ready to step in to reduce the strain on freelancers in the coming months and years.”