As many companies started to feel the pain of possible closure through coronavirus, the Chancellor last night moved to plug some of the gaping holes in his economic safety net for companies.
It is now obvious that the chorus of disapproval from companies-especially SMEs and the self-employed-are finally being heard in the Treasury corridors.
And so last night under an 11.30pm embargo, Rishi Sunak moved quickly to try and right some of the wrongs which Business West has been hearing about from companies who have been coming to our Trading Through Coronavirus website hub.
Top of his list was to ban banks from requesting personal guarantees-like a director’s home-on loans under £250 000.
Apart from putting the family home on the line, some banks administering the government’s new COVID rescue loans were actually charging exorbitant interest rates into the bargain.
Hardly helpful to companies struggling to survive and thinking they would get a helping hand from government-not more debt.
Another hole being plugged in the rescue lifeboat is that businesses with a turnover of more than £45 million were considered too large to qualify for the COVID loans but too small for assistance offered to the largest companies.
That has been changed too.
He announced a new Coronavirus Large Business Interruption Loan Scheme (CBILS).
The Treasury say it will now provide a government guarantee of 80% to enable banks to make loans of up to
£25million to firms with an annual turnover of between £45 million and £500 million.
And the Chancellor says he is extending the CBILS funding “so that all viable small business affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time”.
Business West obviously welcomes the Chancellor’s moves to plug the holes in his economic safety net, but we are still very concerned about the delivery of much of this government support.
At the earliest, monies from government will probably not be available for another three months.
And we have been told stories by self-employed people who fear falling down the cracks in the Chancellor’s package designed to keep them in business.
Rishi Sunak is obviously listening to business but he will now need to deliver before time runs out.