Pressure is growing on the Government to change its business loan schemes after Ministers admitted that less than 2% of firms in the 海角视频 had managed to get support from lenders to get them through the coronavirus outbreak.
Business Secretary Alok Sharma admitted in an interview with Sky TV that only 4,200 had received support, saying he “completely understands the concerns that businesses have” about the low number of loans.
He added: “I have spent the last couple of days talking directly to some of the largest lenders who are part of this scheme and I have been very clear to say to them that we need to get money out of the door as quickly as possible.
“They understand that and banks know that, on this occasion, they have to be part of the solution, and they want to be part of the solution.
“The organisations that I’ve talked to have had people working and continue to work over this Bank Holiday weekend so that they can talk to their customers and provide their customers with that support and I hope that what you will see in the coming days is an increase in money flowing out.”
Shadow Business Secretary Ed Miliband has called for the Coronavirus Business Interruption Loan Scheme (CBILS) scheme to be overhauled, while a number of business groups are also calling for action.
Mr Miliband said: “Just 4,200 loans from 300,000 enquiries - businesses need support now.
“The Goverment must overhaul CBILS and underwrite 100% of smaller loans as in Germany and Switzerland. The risk of doing too little too slowly is much greater than the risk of doing too much, too quickly.”
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Mr Miliband’s comments echo a number of business groups, with the Federation of Small Businesses saying that “banks need to understand that time is of the essence” while the Institute of Directors has said the loan scheme “is still not firing on all cylinders”.
The British Business Bank, which is administering the CBILS scheme, announced at the weekend that four more banks had been added to the list of accredited lenders.
The Bank said it was also reviewing applications from a wide range of lender types and hoped to get “additional finance flowing to smaller businesses across the 海角视频 as quickly as possible.”
The Coronavirus Business Interruption Loan Scheme aims to provide financial support to small and medium-sized firms across the 海角视频 that are losing revenue and seeing their cash flow disrupted as a result of the pandemic. The scheme is a part of a wider package of Government support announced by Chancellor Rishi Sunak for 海角视频 businesses and employees.
Lenders can provide up to £5m in the form of loans, overdrafts, invoice finance or asset finance. Lenders have been given Government guarantees to encourage more lending though the companies taking the loan remain liable for the debt.
But a survey by the British Chambers of Commerce found last week that only 1% of businesses had been able to get support from the scheme, while 8% had been unsuccessful, with the complexity of the application process and a slow or lack of response from the relevant body cited as reasons for not getting support.
More companies have been able to access the grants made available to small companies and firms in the hospitality, leisure and retail sectors, with 100,000 small businesses having been paid a share of more than £1bn through schemes administered by local councils.