Written by: Keith Tully
Published: 24th April 2020
The process of providing support to businesses who’ve been badly affected by the coronavirus crisis must be accelerated quickly if companies across the country are to be saved from collapse.
That’s the view of the Confederation of British Industry (CBI), which is urging the Treasury to provide 100 per cent backing to loans intended to reach SMEs in serious financial trouble.
A series of recommendations have been put forward by the CBI, which includes support for a shift in government policy from backing 80 per cent of emergency loans towards covering 100 per cent of those loans up to the value of £500,000.
Doing so in the context of the recently created Coronavirus Business Interruption Loan Scheme (CBILS) would not be a “silver bullet” but could improve the speed of delivery of essential credit facilities, the CBI has said.
The business lobby has also urged the government to work with lenders to establish mechanisms that create a “fast and simple route to loans worth under £25k for small businesses who may be completely new to borrowing”.
Documentation processes involved in the CBILS and business grant systems set up in response to coronavirus also need to be streamlined as a matter of real urgency, the CBI says.
Calls have also been issued for business rates to be suspended for three months across England, Wales and Scotland, as they already are in Northern Ireland.
As of April 23, only around 16,000 companies had successfully been approved for and received funds via the CBILS, which equates to only a very small proportion of the UK businesses that are currently in dire need of emergency financial support.
The latest surveys of companies across the country showed extraordinarily sharp downturns in activity across the manufacturing and services sectors of the UK economy.
There is no doubt that many thousands of SMEs and larger companies as well will soon be in an acute state of financial distress, if they are not already in that position.
“The current loan scheme is up, running and working for many. Now we need another big push to get money out the door faster,” said Dame Carolyn Fairbairn, director-general of the CBI.
“This is a race against time, and the only winning strategy is scale, speed and simplicity. Nothing should be left on the table.”
12th August 2020
The UK economy has officially fallen into recession after suffering the sharpest downturn on record between April and June of this year.Read More
5th August 2020
The British Chambers of Commerce (BCC) has called on the chancellor of the exchequer Rishi Sunak to change his approach to providing support to businesses across the UK economy.Read More