Good and grim news from the Chancellor Rishi Sunak as Boris Johnson stepped back into Downing Street and the debate over relaxing the lockdown, says Ian Mean of Business West.
The good news will be very welcome by small business so worried about the delays experienced by many of them in applying for cash through the government’s much-heralded Coronavirus Business Intervention Loans Scheme or CBILS.
On top of the delays, the loans only carried an 80% guarantee by government.
So, having listened to the complaints from small business struggling to survive, the Chancellor’s team have developed a new, quick micro-loan scheme with 100 % government backing.
Business leaders across Coventry and Warwickshire have also welcomed the scheme.
The Coventry and Warwickshire Chamber of Commerce say the Bounce Back Loans scheme is crucial to plugging the gap for those companies that may have been struggling to access Coronavirus Business Interruption Loans (CBILS).
It starts on Monday at 9am and small business will be able to apply for these new bounce-back government loans for 25 % of their turnover up to a maximum of £50 000 with the go vernment paying interest for the first twelve months.
“There will be no forward-looking tests of business viability”, was the assurance from the Chancellor.
And he added: “No complex eligibility criteria-just a simple, quick standard form for businesses to fill in.
“For most firms, loans should arrive within 24 hours of approval.
“I know that some small businesses are still struggling to access credit – they are in many ways the most exposed businesses to the impact of coronavirus.
“If we want to benefit from their dynamism and entrepreneurial spirit they will need extra support to get through this crisis”.
He is absolutely right, and that is borne out by critical comments from firms to Business West’s recent Trading Through Coronavirus survey of over a thousand companies in the South West.
So, good news for our small companies but some grim news too.
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “The picture is changing each day and the Government is having to design and deliver support to a whole range of businesses, the majority of whom are desperate for cash to help them through this period.
“The new system will go live next week (May 4) and, once again, we will be keeping a close eye on how that process works practically.”
British Chambers of Commerce director general Adam Marshall said: “The Chancellor has demonstrated he is listening to the concerns of our business communities and taking steps to get cash to the front line where it is needed.
“This new route for our smallest companies to apply quickly and get a fast decision will be crucial to those who have struggled to get a CBILS loan.”
The Chancellor told the Commons that “survey evidence suggests that a quarter of firms have stopped trading”, added Business West’s Ian Mean.
He made no amplification of that alarming figure—many of them might have just paused trading, of course.
But this figure given by our Chancellor of the Exchequer must be of great concern for our economy.
And he also said that more than 4 million jobs have now been furloughed.
The challenge both the Chancellor and the recovered Prime Minister are facing is immense.