KPMG: Unsustainable debt levels? How do we fund our way out of this crisis?


The UK economy has been largely put on hold for 10 weeks and the resumption of normal commercial activity is likely to be slow and unpredictable. Companies find themselves shutdown or severely disrupted and are building up a debt pile of government support, deferred supplier payments and extended facilities with their commercial funders. Business leaders, by their nature, are looking to the future – to invest in the parts of their business that can gather momentum in the new economic reality. How will they fund the opportunity to invest in efficiency, productivity and growth against this backdrop?

Corporate debt levels were high going into this crisis, with business leaders managing a fine line between an efficient capital structure and tipping towards a level of debt that created risk or damaged corporate development in the future. This delicate balance has now been completely blown out of the water, as companies incur losses and delay payments to suppliers, lenders, landlords and HMRC. What sort of mindset does this now create, as those business leaders walk to their desks each morning?

Read the full insight on the KPMG website