Unitas boss Darren Goldney has called on the government to underwrite the debts that small businesses rack up during the coronavirus outbreak so suppliers can extend credit in confidence.
Goldney said that – thanks to government intervention – massive investment was due to flow into wholesale industry’s customer base but that “the theory does not match the practical reality”.
He said: “Collectively, we must work on ensuring a government-backed scheme to ensure the grant system is used to pay wholesaler credit – or the government must support the bad debt. The interest-free loans at the time of writing still appear inaccessible to wholesalers.”
Goldney explained that the value of assets in wholesalers’ businesses may stop them accessing crisis loans and force a situation where they can only borrow at commercial rates – and with no guarantee of debts to them being paid in the future.
“Some might argue this is a disgrace. Some may argue it’s a lack of understanding, but either way, it’s a heart wrenching situation,” he said.
Bad debt issues have started to pile up for Unitas members. Goldney said customers were cancelling direct debits as their businesses were forced to close.
He also raised the issue of unsold perishable stock, a problem that other trade associations are wrestling with.
