United Kingdom

ALEX BRUMMER: US firms not having to deal with UK bureaucracy when applying for coronavirus loans

Getting money out to small businesses is a priority for dealing with lockdown. 

But it is almost two weeks since the Chancellor, Rishi Sunak, unveiled the Coronavirus Business Interruption Loan Scheme and just 2,500 loans, worth £453m, have been made. 

Given there are 5.9m small and medium firms in Britain and an estimated 300,000 applications, the chances of the cash reaching needy firms before they tip over a precipice looks remote. A US scheme, unveiled a week later than its UK counterpart, also has detractors.

Slow progress: It is almost two weeks since the Chancellor Rishi Sunak unveiled the Coronavirus Business Interruption Loan Scheme

It processes loans through the Small Business Administration (SBA) which then passes on approvals to commercial banks. Bank of America alone has approved 177,000 loans worth $32.6 billion (£26.3 billion) in just over a week. 

The White House says that £56.5 billon of such loans have been sorted. Indeed, the take-up from America's estimated 30m SMEs is so strong that US Treasury Secretary Steve Mnuchin, regarded as one of the few heroes of the crisis, is going back to Congress to ask for an additional $250 billion (£202 billion) of financing. The US was eager to get the cash into firms' bank accounts as soon as possible. 

To make this happen it insisted applications were made online, using an A4-style form which could be swiftly dealt with. The US had several advantages. 

Firstly, the SBA has been around since 1953, has district offices and is much more established than the British Business Bank in assessing the needs of small firms. 

Secondly, the US has a developed regional and local banking system and so the SBA has been able to link into 1,800 potential lenders. 

There are questions from some American firms as to why they are waiting on the cash even though loans have been approved. 

That is disappointing. But they should be grateful that they are not having to deal with UK bureaucracy and sclerosis.

Home help 

Tesco was on a hiding to nothing when it decided not just to pay a dividend but to increase the payout.

In the current lockdown and amid huge economic uncertainty, companies are required to take aboard the needs of all stakeholders not just investors. 

As a company in the frontline of making sure Britain is fed and can maintain hygiene standards, Tesco is doing most of the right things. 

It is enforcing social distancing at stores, promising staff bonuses of 15 per cent and is acting as a kind of super-employment agency as much as a supermarket. 

It has recruited 45,000 workers to cover 50,000 absentees self-isolating. So it is fulfilling its social obligations. 

The Covid-19 crisis is a mixed commercial blessing. Yes, sales are 30 per cent up as households have locked down, but income from ancillary activities such as in-store cafes is down. 

Giving something back to shareholders who had to forgo dividends in 2016 and 2017 because of the accounting scandal is justified. 

And of course dividends are the lifeblood of everyone's pensions and savings so we should all perhaps be grateful for small mercies. 

But I confess to being a little uneasy. Throughout the current crisis there has been praise for those companies which have decided that in the present atmosphere, with the world falling into the steepest recession in living memory, conserving cash is a priority. 

Even if one takes into account the £8 billion cheque on its way from the sale of Thailand and Malaysia operations there should be forbearance. 

It might have been sensible to hold the dividend, until there is more certainty as to how the crisis plays out. Citizens and the Exchequer are making huge sacrifices. 

Tesco is a big beneficiary of the suspension of business rates. Chief executive Dave Lewis and his executive team could still set an example by forgoing bonuses this year and resetting the long-term incentives plans in line with the spirit of the times.

Tech savvy 

Relx chairman Sir Anthony Habgood is among those bosses whose departure has been cancelled as a result of Covid-19. 

The exhibitions division has been brought to a shuddering halt. Legal services could also suffer. 

Its transformation from the old 64 per cent-print Reed Elsevier in 2000 to 9 per cent-digital in 2020 has proved timely. 

All ready for the Zoom age.

Football news:

Juventus can exchange Bernardeschi for Jorginho
Real Madrid held a team training session for the first time since March
ESPN reporter: Arsenal did not offer Aubameyang a new contract
Lucas Vasquez: Real Madrid have 11 finals ahead of them. I hope we can win the title
Liverpool confirmed that they will finish the season in New Balance
Zlatan will return to Italy on Wednesday or Thursday for a routine check-up with doctors in Milan
Manchester United will try to buy Sterling if he leaves city. In the short list United – Sancho, Grealish and Rodon (The Independent)