Rishi Sunak – Mr Chancellor – Meet the challenge…and deliver to the UK’s Economic Engine that is the Owner Managed / SME Businesses of this country the fuel it needs to keep on turning.
Last month you announced business support from the Government worth £330 billion.
The key elements were the Job Retention Scheme. Furloughing employees with a 80% payout on wages – which means that from Monday 20th April up to 2.3 million businesses could be applying for the funds to pay wages from the HMRC – without that many of those businesses will fail and create mass unemployment, and without those businesses the economy will not have the ability to pay the taxes to repay the £330 billion – the failures will happen within 7 DAYS!
So far there has been abject failure to deliver more than £1.1 billion of the £330 billion to just over 6,000 of the 5.8 million small businesses in Britain.
Since announcing the Coronavirus Business Interruption Loan Scheme last month two key changes have been made, namely that applicants no longer have to be rejected by other sources of finance and that on loans up to £250,000 there is no longer a requirement to obtain Personal Guarantees from the business Directors.
The next problem is that the banks are assessing the business case under normal credit rules as they are being asked to carry 20% of the risk, with the Government covering 80% . Under circumstances not created by the business community ( unlike the banking crisis in 2008 ) is it not appropriate for the banks to be instructed to change their approach? Otherwise Rome will burn whilst they are following procedure…
The Government can help the banks unblock this barrier by raising the guarantee to 100% and enable the distribution of funds and enable survival of our Economic Engine through this crisis.
If you’re uncertain about the recent changes and need to seek advice, Merlin are here to help support you in anyway they can, offering advice and guidance in these uncertain times.