A FIFTH of all small and medium-sized businesses in the UK are unlikely to get the cash they need to survive the next four weeks.
A network of accountants suggests between 800,000 and a million firms nationwide may soon have to close after the banks have refused them emergency loans.
The banks meanwhile say that they are following the rules set out by the government.
Chancellor Rishi Sunak said two weeks ago that businesses would be able to walk into bank branches and discuss Coronavirus Business Interruption Loans (CBILs) of up to £5m to help them survive the shutdown.
The false promise from the chancellor was that ‘any good business in financial difficulty who needs access to cash to pay their rent, the salaries of their employees, pay suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms.’
Now, thousands of struggling firms can’t get through to their banks by phone or, when they do, are being told by the banks they’re not eligible and not to waste the bank’s time.
Mayor of London Sadiq Khan pleaded yesterday that ‘banks have got to step up’ to help small and medium-sized businesses survive during the coronavirus pandemic.’
Steve Lord runs Belgrave & Powell, a Nottingham-based engineering group employing 120 people and supplying services to customers such as BAE’s Samlesbury site, where the F-35 and Typhoon fighter jets are made.
Since Samlesbury halted production, his business, like millions of others, is facing the prospect of cash drying up, threatening its ability to pay wages and stay afloat.
‘I was heartened and astonished to see the unprecedented help that was announced by the government two weeks ago,’ he said. ‘But we put one of our most senior people on it and as each day passed it was disappointment after disappointment.’
He said some of the approved lenders were demanding interest rates of up to 50%, which Lord believes is robbery.
Meanwhile, he said, High Street banks were charging around 7%, however he was told it could be as long as a month before his firm got the money.
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