The UK’s corporate financial health has taken a battering over the last year with swathes of small firms among those most damaged. Bank lending to small- and medium-sized enterprises (SMEs) in the year to October was more than 40 times higher than in normal times. As lockdowns persist and increasing numbers of companies max out their borrowing limits, for many firms it looks like the only answer will be bankruptcy.
In a paper published last month by the Institute for Public Policy called Taking a stake: public equity for economic recovery, Carsten Jung, George Dibb and Mathew Lawrence argue that public equity injections could play a key role in supporting businesses that will be viable when demand picks up.
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