Originally written by Timothy Adler on Small Business
Chancellor Rishi Sunak may change coronavirus emergency business loans yet again in the face of mounting evidence they aren’t working.
Yesterday, SmallBusiness.co.uk revealed that the majority of small businesses are having their loan applications turned down, even since the chancellor loosened the scheme on April 3.
Today, the British Chambers of Commerce announced that only 2 per cent of businesses surveyed had had their loan applications approved.
>See also: Fewer than 10% of businesses can access government coronavirus funding
On Tuesday evening, Rishi Sunak told the Financial Times that he would look at other countries to see if the government “could learn and improve” on the small business bailout scheme, which provides interest-free loans of up to £5m for up to one year before bank interest rate kicks in.
Switzerland, on the other hand, offers up to £400,000 as an interest-free loan repayable over five years. The Swiss government covers the entire amount. And cash can be accessed within 24 hours, not weeks, as in the case in Britain.
100-per-cent guarantees
George Osborne, the former Conservative chancellor and editor of the Evening Standard in London, told the BBC on Tuesday that the government should follow suit for the smallest businesses.
Ed Miliband, Labour’s shadow business secretary, has already called for 100 per cent guarantees for smaller companies.
Mr Sunak said there was an argument in looking at how other countries are helping microbusinesses, but the government could find itself exposed if credit checks are waived.
Small businesses complain that either banks are slow to respond, even if you can get hold of them at all, and that they are only making the Coronavirus Business Interruption Loan Scheme open to existing customers.
Banks in turn are saying that the British Business Bank, which is running the CBILS, is creating a bottleneck in having to rubberstamp coronavirus emergency business loans.
On Saturday, the BBB added the first two fintech banks, OakNorth Bank and Starling Bank, in an effort to break the logjam.
Coronavirus emergency business loans may be changed yet again
via https://ift.tt/2Jn9P8X by Timothy Adler, Khareem Sudlow
