Government beefs up Coronavirus support for business and jobs amid concerns help is not always getting to all companies that need it
The Government announced in March a wide ranging scheme to support businesses and jobs during the lock-down. The Government have announced they are improving the scheme, called the Coronavirus Business Interruption Loan Schemes. At the same time, some concern has been raised about how effective the scheme has been to date.
Improvement to the schemes
• Banks will not be allowed to obtain personal guarantees for the whole business loan under the scheme. Previously, banks were able to insist company owners were personally liable for the scheme loans made to companies, even though the Government were effectively guaranteeing most of the loans
• £90 million of loans made to 1,000 smaller companies as of 3rd April
• £1.9 billion of loans to large corporate businesses made
Chancellor confirms scheme is offering help to businesses
Rishi Sunak MP, the Conservative UK Chancellor, stated;
“We are making great progress on getting much-needed support out to businesses to help manage their cashflows during this difficult time – with millions of pounds of loans and finance being provided to hundreds of firms across the country.
And now I am taking further action by extending our generous loan scheme so even more businesses can benefit. We have also listened to the concerns of some larger businesses affected by COVID-19 and are announcing new support so they can benefit too.
This is a national effort and we’ll continue to work with the financial services sector to ensure that the £330 billion of government support, through loans and guarantees, reaches as many businesses in need as possible.”
Business Owner confirms the scheme has helped save jobs in his business.
Brian Goodlad, of HTES (Northern) in Hartlepool, stated;
“We have seen a significant drop in sales following the start of the coronavirus outbreak. The CBILS support provided by Business Enterprise Fund provides a boost to our cashflow which ensures certainty and stability in very difficult circumstances.
It is an important lifeline that will help us survive and safeguard 15 full and part-time jobs.”
Concerns raised the schemes are not reaching enough businesses
Mike Cherry, representing small business from the Federation of Small Business, has confirmed the schemes have not always worked and supports the improvements to the schemes;
“We welcome the Chancellor’s personal intervention to ensure that banks deliver the government-backed emergency loans which are urgently needed by many small businesses.
Time and again we’ve heard from members who’ve approached their bank seeking an emergency loan, only to be offered anything but. Many small businesses have just had to pay monthly wages and national insurance bills. They also have many other outgoings that they need to pay, today.
New figures showing that fewer than 1,000 emergency loans have so far been approved by banks, out of 130,000 enquiries, illustrate why today’s intervention from the Chancellor was needed. We would like to see weekly updates on these numbers.”
The Labour Party’s spokesperson, MP Bridget Phillipson, has also raised some concern about the effectiveness of the schemes so far;
“With so many businesses struggling during this crisis, the Government needs to ensure they can access the financial support they need.
Labour will work with the Government to make the improvements needed to ensure support is being given to businesses swiftly. Ministers must also provide regular updates on the number of applications and approvals to provide assurances that funds are actually getting to firms.”