The access to the money these schemes offer is no longer quick and many businesses face weeks of battles with their bank to access the funds.
Whilst not announced there has clearly been new guidance issued to the banks by Government to tighten up on the lending and reduce the fraud risk. This is shutting the door after the horse has bolted.
For those businesses desperate to access the cash now who may have not previously used the scheme they face weeks of delays with the banks answering many questions regarding their business affairs, connections with other businesses and use of the funds.
These may be fair questions but with the banks still swamped the promised 48-hour process often takes four to six weeks, which is far too long.
For those businesses accessing the BBLS, the Chancellor should increase the limit to either £75,000 or £100,000. For those businesses accessing the CBILS he should increase the Government guarantee to 100% on borrowing of up to £250,000 and ask banks to recalculate affordability measures on borrowings based on the extended ten year term for CBILS borrowings and allow businesses to increase their existing loans.
With the continuing changing business landscape from lockdown to no lockdown, to tiers and movement between tiers, businesses are constantly having to adapt to their trading environment. Buying stock, getting rid of stock, buying PPE, making their premises Covid-19 secure, having people in their offices or working from home. All of this requires further cash to be spent by the business at a time when for many they have exhausted their cash resources.
When the BBLS was introduced this was to allow businesses to access funds quickly and was capped at £50,000 or 25% of their annual turnover. However, this limit has not been changed and despite the fact that the crisis has carried on for much longer than anticipated and businesses have been expected to use the scheme multiple times. Given the initial average loan for the first few months was over £30,000 it is clear this limit is woefully inadequate.