Responding to the Government’s announcement of measures aimed at improving small business access to the Coronavirus Business Interruption Loan Scheme (CBILS), Federation of Small Businesses (FSB) National Chairman Mike Cherry said: “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.
“They were promised interest-free, fee-free, government-backed support from banks but, until now, the process for securing it has proved nightmarish for many.
“Removing the need to be offered standard products first – with an interruption loan as an afterthought – marks a big step forward. So too is ensuring small businesses can qualify for an emergency loan application on the basis of one simple criterion: whether or not you’ve been negatively impacted by the spread of coronavirus is the only question that counts at this juncture.
“Ruling out the need for personal guarantees where smaller loans are concerned is also very welcome. These are business loans being sought at an incredibly difficult time – borrowing should be against business, not personal, assets. Loans to the smallest businesses should be pushed out of the door and into bank accounts, now.
“Banks should also be pushed to exercise restraint when it comes to setting the rates that will apply on these loans once the initial twelve months is up. No one should be profiteering from these loans which are not standard commercial transactions, but survival mechanisms.
“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.
“Taking on more debt is a daunting prospect for many smaller businesses in this climate – so we are keen to continue our constructive engagement with the government around how debt can be repaid in a sustainable way.”