UK SME Businesses Struggling to Access Government Promised Cash
The government appear to be doing their best given the circumstances they find themselves in. The ‘temporary support for business package‘ put together is extensive and includes:
- a Coronavirus Job Retention Scheme
- deferring VAT and Self-Assessment payments
- a Self-employment Income Support Scheme
- a Statutory Sick Pay relief package for small and medium-sized businesses (SMEs)
- a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
- small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
- the HMRC Time To Pay Scheme
There’s good intent – but there’s a problem. Saying these things are available and making them available are two different things. Just ask anyone applying for Universal Credit for the first time and see what horrors they have to report.
For U.K. businesses right now – they are struggling to access the cash they need as government efforts fall short, according to the British Chambers of Commerce.
It appears that just 1% of companies surveyed by the BCC had managed to access Chancellor Rishi Sunak’s Coronavirus Business Interruption Loan Scheme. Many said they had been unsuccessful, citing the complexity of the application process, slow responses and, in some cases, no answer at all.
SafeSubcribe/Instant Unsubscribe - One Email, Every Sunday Morning - So You Miss Nothing - That's It
That kind of delay will undermine the Treasury’s attempts to keep businesses afloat and support jobs during the pandemic. Alarmingly, the survey found 6% had already run out of cash, while 16% had less than a month’s reserve and 41% had only 1-3 months, meaning the bottlenecks could prevent funding from arriving in time. In just four weeks time, 1.3 million SME’s will be out of money and another 2.4 million businesses will fold eight weeks later if the government is unable to stump up the cash.
Companies applying for small business grants have also reported problems, with eight out of every 10 firms not meeting the criteria and others reporting insufficient information was available, the BCC said.
Adam Marshall, director-general of the BCC said:
“Many businesses face a cliff-edge scenario. Every minute counts, and governments, local authorities and banks must do everything in their power to ensure support gets to firms on the front line more quickly.”
Sunak last week announced an extension of the measures, fine-tuning a program that has approved £90million in loans, according to the government. Although it is just one of the programs aimed at limiting the economic fallout from coronavirus, including a package of wage subsidies to help employers avoid layoffs – the sum’s granted so far have been a drop in a very big bucket.
Twenty percent of the 1,017 respondents surveyed by the BCC said they intend to furlough all their staff.