58 per cent of small and medium sized enterprises (SMEs) feel their banking provider has been slow to offer help during the Covid-19 crisis. The findings, contained in a poll of 100 business owners of UK SMEs by the Lanop Accountancy Group, raises fresh questions about the level of support available to companies struggling during the Coronavirus outbreak and subsequent lockdown.
The survey found that nearly one third of companies (29 per cent) have applied for a loan from their current banking provider to help them get through Covid-19 and 13 per cent still plan to make full redundancies despite making use of the government’s Coronavirus Job Retention (Furlough) support scheme.
In addition to this, the respondents were asked about how tax changes could provide support. More than half (65 per cent) agreed that if the government reduces VAT tax for 2020 their businesses will be given a lifeline during the crisis. Similarly, of the business owners surveyed, 80 per cent think that the government should reduce stamp duty tax to help the declining property market.
Interestingly, most of the business owners (89%) are happy with their accountant’s advice and support during this time. However, some firms predict that they will face bankruptcy on account of the pandemic.
When asked whether the government is doing a good job when it comes to helping businesses during the Covid-19 outbreak, more than half (53 per cent) agreed that they were, and 67 per cent that communication around specialist loans, grants, and furlough support schemes has been good.
Wayne Johnson, CEO, Encompass Corporation comments: “The financial challenges posed by the coronavirus pandemic have already proved monumental, and it is worrying that these companies are feeling neglected and unimpressed by their provider’s handling of the situation. Complex, expensive and -long due diligence processes are preventing British businesses from getting access to the finance and banking services they urgently need. Banking security checks should not act as an obstacle to business owners accessing the credit and services they require.”
“Even though the new government scheme offers optimism during a difficult time, with many business owners struggling to pay bills with no revenue coming in, it is crucial that the big banks who offer the scheme follow the correct regulatory measures, and introduce relevant RegTech and automation technology to cope with this influx in demand. Now, more than ever, banks and financial services organisations should utilise the power of automated solutions to comply with important banking processes swiftly and securely. Doing so will help to get companies fast access to any necessary financial support during what is the most challenging of times.”