Longer repayment terms for Bounce Back Loans may not be enough to ease the debt burden on travel agents if the industry takes longer than other sectors to recover.
Agents quoted in this week’s edition of Travel Weekly gave a muted welcome to the government’s decision to give firms more time to repay state-backed loans of up to £50,000, handed out interest-free for the first 12 months from May last year.
Chancellor Rishi Sunak has now extended the repayment period from six to 10 years and given options to pause repayments for six months, or pay interest-only for six months.
But many agents said the lack of certainty about future travel meant they did not know when they would be able to make repayments, and feared long-term debt.
Pole Travel director Jill Waite, who took a £50,000 Bounce Back Loan, said extending the term was “good news” but added: “I’m going to have to use my loan for rent. It will help, but we will go into debt.
“What if, in another six months, travel has not started back up and I owe £50,000 to the government?”
Gemma Antrobus, owner of Haslemere Travel, also took a £50,000 loan and has used it to pay bills and rent.
She said: “We’ve not had the luxury of sitting on it for a rainy day. Are we supposed to be grateful [to Sunak]? He has no choice [but to extend the loan terms].
“At the moment there is no way travel businesses can pay loans back. And we don’t know if we’ll be earning any revenue from May.”
C The World director Carolyn Park said a six-month ‘payment holiday’ was useful provided the industry was up and running by autumn. She stressed most agents do not earn money at the point of booking.
“I’m hoping six months will get us to a point where we don’t have to use our loan and can pay it back,” she said. “I don’t want to get into debt.”
Cruise homeworker Jack Kay, director of Jack’s Cruise Club, took a £16,000 loan. He said: “The Bounce Back Loan was for last year. Half of mine went within a day. We need the same amount again for this year.”
Antrobus insisted support should be in the form of grants, not loans.
“We should not have to get ourselves into more debt,” she said.