Government pressures banks to support small independent businesses
Posted on in Business News , Cycles News , Political News
About the Coronavirus Business Interruption Loan Scheme
The temporary Coronavirus Business Interruption Loan Scheme was introduced last week to provide SMEs with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years.
The government also announced that it will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
The government listed 40 accredited lenders able to offer the scheme, including all the major banks. More information about the scheme and the full list of accredited lenders are available on the British Business Bank website.
Are banks failing independent retailers?
A recent survey completed by a trade organisation within the Independent Retailers Confederation (IRC) asked 300 independent retailers from a variety of sectors across the nation about the support they've received following the outbreak of coronavirus.
The results indicated that a large majority are currently getting little or no help from banks. Just 1% of the independent retailers surveyed that had applied for a business interruption loan said that they had been successful so far. Almost 20% of respondents said that they have approached their lender for help, with many still waiting for a response.
One respondent said: "I was advised an overdraft would be better suited for my needs with an arrangement fee of £150 and more than 6% interest."
Another said: "Had a rather lengthy discussion that was very downbeat and obstructive even though they hold security on my mortgage-free business premises."
The government's pledge to pressure banks into making Covid-19 cash accessible
On Wednesday the 1st of April Business Secretary Alok Sharma called on high street lenders to ease access to the Coronavirus Business Interruption Loans Scheme (CBILS) for small independent retailers during the crisis.
His intervention comes following reports from businesses that their banks were making it increasingly difficult to access the Coronavirus Business Interruption Loan Scheme.
After being questioned regarding the problems that small businesses are having regarding the Loan Scheme, the Business Secretary said:
"Loans for businesses are also being issued through the Coronavirus Business Interruption Loan Scheme. The chancellor, together with the Bank of England and the FCA, wrote to the chief executives of UK banks to urge them to make sure the benefits of the loan scheme are passed through to businesses and consumers. It would be completely unacceptable if any banks were unfairly refusing funds to good businesses in financial difficulty. Just as the taxpayer stepped in to help the banks in 2008, we will do everything we can to help the banks repay that favour and support the businesses and people of the UK in their time of need."
Mr Sharma has also urged local authorities to speed up the availability of grant money for small businesses.
Hopefully this intervention from Mr Sharka will mean a higher success rate among independent retailers, we will continue to update our members with any new information.
