BCC: UK businesses struggle to access government loan and grant schemes

Results from the second British Chambers of Commerce (BCC) Coronavirus Business Impact Tracker have revealed that most businesses have not yet successfully accessed the government’s Coronavirus Business Interruption Loan Scheme (CBILS) and the grants for small businesses.

BCC: UK businesses struggle to access government loan and grant schemes

The data has revealed that just 1% of firms had successfully accessed CBILS and 7% are receiving grants.

The tracker also highlighted that just 57% of firms have three months cash in reserve or less, 6% of respondents have already run out of cash.

Similarly, 37% of respondents said they were planning to furlough between 75 to 100% of their workforce over the next week.

The BCC found that 8% of respondents had been unsuccessful in accessing CBILS, with those who were unsuccessful citing the complexity of the application process and a slow or lack of response from the relevant body as the reason for a lack of success.

It is hoped that the government’s announcements made on April 2 intended to improve access to the scheme will see success rates increase in future weeks.

The data also revealed that 7% of respondents were currently using grants for small businesses, but 14% had been unsuccessful. When asked about the reasons they were unsuccessful:

  • 83% said they did not meet the criteria
  • 14% said they had a slow or no response from the relevant body
  • 8% said there was insufficient information or guidance available

Similarly, data from UK Finance has revealed that just 2,022 loans have been made to UK SMEs through the government’s coronavirus business lending scheme, with less than one per cent of enquiries resulting in loans.

Commenting on the results, Dr Adam Marshall, BCC director general, said: “Our latest data shows that many businesses face a cliff-edge scenario, either at the end of this month or over the course of the next quarter.

“We’ve seen a big jump in the number of firms furloughing staff, and many are now starting to apply for access to government loan and grant schemes to keep themselves afloat. Yet our research suggests that support is only starting to reach firms on the ground.

“We are pleased that the Chancellor is listening and responding to our calls to strengthen the existing support. Improvements to the CBILS scheme should help more businesses get access to the cash they need over the coming days and weeks. This could be the difference between survival and insolvency for many firms.

“It’s vital that governments across the UK continue to work closely with business over the coming days. Every minute counts, and governments, local authorities and banks must do everything in their power to ensure support gets to firms on the front line more quickly.”

The BCC’s weekly tracker poll, which serves as a barometer of pandemic’s impact on businesses and the effectiveness of government support measures, received more than 1,000 responses and is the largest independent survey of its kind in the UK.

The second set of polling was conducted from April 1-3 and follows further announcements made by the government to strengthen CBILS and expand support to mid-sized firms.

William Garvey, managing director at Leyton UK, added: “The coronavirus business interruption loan scheme is pointless if businesses cannot actually get hold of the funds quickly. Rapid access to loans is a matter of survival for SMEs right now up and down the country. Businesses need cash in a matter of days, not weeks. The Government must reduce bottlenecks and accelerate the processing of loan applications or else many SMEs will collapse, putting vast numbers of jobs at risk and causing huge damage to the UK economy.

“Businesses must explore every avenue for funding during this period. While there are bottlenecks for government loan schemes, HMRC are continuing to process claims for R&D tax credits at normal speeds. This can be a good line of relief for businesses to pursue if they are eligible and businesses may be able to claim thousands of pounds at a time when cashflow has never been more crucial.”

Read all of our articles relating to COVID-19 here.

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