Coronavirus: Small Firms Still Struggling to Access Emergency Cash

As few as one in 60 small businesses have so far been able to access funds via the government’s emergency coronavirus loans scheme.

The scheme was created almost a month ago with the aim of providing widely available financial support to small firms in serious difficulty but relatively few have succeeded in accessing loans that could help them.

Indeed, only 5,000 small scale operators are known to have received or been approved for financial support via the government’s coronavirus business interruption loan scheme, according to the Times.  

Close to 300,000 queries are believed to have been made to the banks who’ve been tasked with distributing the government-backed emergency loans but only one in 60 have been approved.

Banks have been told that the government will guarantee 80 per cent of amounts lent to companies who’ve been hit by the coronavirus crisis but, as yet, the scale of lending is much smaller than had seemingly been envisioned by the chancellor of the exchequer Rishi Sunak and his cabinet colleagues.

Mr Sunak has repeatedly said in recent weeks that the government would do “whatever it takes” to support the UK economy through the coronavirus outbreak but there are serious concerns about the extent to which small businesses will be left unsupported in the coming weeks and months.

Many tens of thousands of small and medium-sized companies are known to be running out of cash as people across the country remain in lockdown.

Economists and politicians, including the shadow chancellor Anneliese Dodds, have raised concerns that having relatively few emergency loans granted to small businesses during the ongoing crisis will magnify the effects of coronavirus on the UK economy and jobs across the country.

Responding to issues raised in relation to his emergency loans scheme, the chancellor said the government is working around the clock to fix the problems that have meant so few loan applications have so far been approved.

“I’ve spent the last couple of days talking directly to some of the largest lenders who are part of this scheme and I’ve been very clear to say to them we need to get money out of the door as quickly as possible,” Mr Sunak said.

“I hope what you will see in the coming days is an increase in money flowing out. It is vital that we do everything we can to support our businesses.”