Hundreds of social enterprises and community-run businesses have been forced to close because they were not given access to government support throughout the Covid-19 pandemic, an industry group has said.
Social Enterprise UK said both the structure of the organisations and their choice of bank, which is often a social or ethical bank, meant they were unable to access bounce back loans and grants.
Speaking to the BBC, the Restore Trust, a social enterprise based in Bristol, revealed that its bank was not accredited for the government’s bounce back loan scheme. It says it tried to open an account and apply for a government loan from every bank listed on the scheme, but was refused.
Restore Trust chief executive, Suzanne Thompson, said: “It did feel like the criteria the bank were using to apply them were flawed.
“Some businesses that were slightly risky were able to put in an application and the money was in their account the next day.”
Social Enterprise UK said some members had been successful in opening new accounts with accredited banks and applying for a bounce back loan, but others had found it “impossible”.
The lobby group estimates that one in five social enterprises have been forced to close during the pandemic because they have not been able to access support. There are roughly 100,000 social enterprises in the UK employing more than two million people.
Andrew O’Brien, director of external affairs at Social Enterprise UK, said: “The government just ignored the [ethical lenders] and assumed that mainstream lenders would pick up the slack, which they haven’t.
“A lot of social enterprises are desperate to get back to helping people and they are not going to be able to do that if they can’t get access to the financing they need.”