United Kingdom

Firms struggling to secure emergency Covid business loans

Struggling firms which applied to their bank for an emergency business loan last week were eight times more likely to be rejected than approved, according to the British Chambers of Commerce (BCC).

The lobby group warned support to help companies survive the Covid-19 crisis is ‘only starting to reach firms’, as it released results of a survey of more than 1,000 members.

Just 1 per cent of firms successfully applied for the new business interruption scheme last week, while 8 per cent of firms were turned down.

The British Chambers of Commerce warned support to help firms survive the Covid-19 crisis is 'only starting to reach firms', as it released results of a survey of more than 1,000 members

The poll also showed only 7 per cent had received new grants from their local council which have been made available to small High Street firms, including handouts of up to £25,000 for those in the retail, leisure and hospitality industries.

Twice as many – 14 per cent – were turned down for the grant, with most told they did not meet the criteria. 

The survey was carried out between April 1 and 3, when Chancellor Rishi Sunak announced a major overhaul of the business interruption loan scheme.

Companies had complained that they were being routinely turned down for these Government-backed loans, which are interest-free in the first year, and offered the bank’s own, more expensive loans instead.

The BCC report underlined just how urgently many firms need cash. 

It found 57 per cent of firms have three months of cash in reserve or less, while 6 per cent have run out of money.

Dr Adam Marshall, director general of the BCC, said: ‘Many businesses face a cliff-edge scenario, either at the end of this month or over the course of the next quarter.

‘Our research suggests that support is only starting to reach firms on the ground.’

Football news:

Ex-city defender Onuoha: I never felt safe in the US. If the police don't like it, you can lose your life
Barcelona wants to bring back 19-year-old Manchester City defender Garcia. The English are not going to let him go
Gianni Infantino: We must all say no to racism and violence. In any form
Barcelona for 4.5 million euros will buy 70% of the rights to 19-year-old forward Sao Paulo Maya
Martin Ødegaard: Sociedad wants to get into the Champions League is a dream. It's hard to fight Real Madrid and Barca, but we can fight the rest
Newcastle midfielder Longstaff is close to a move to Udinese. His salary will increase by more than 30 times
Milan defender Duarte was injured. This is the second injury at the club after resuming training