Local MP, Patricia Gibson has urgently contacted the Chancellor of the Exchequer to express concerns about the administration of the Coronavirus Business Interruption Loan Scheme (CBILS) after British Chambers of Commerce figures show only 2% of firms applying had so far obtained loans.
Mrs Gibson said:
“The priority following this health crisis is to have businesses up and running quickly so our economy can speedily recover.
“With reports of banks planning exorbitant interest rates on government-backed loans of 35% following the initial 12-month period of the CBILS, there is genuine alarm.
“The Chancellor must heed calls from the Federation of Small Businesses that emergency loans should have interest rates capped at 6%. It is unacceptable for banks to profiteer from loans which are survival mechanisms, not standard commercial transactions.
“The British Business Bank in charge of the CBILS has approved four new lenders for accreditation but this does not go far enough. Challenger banks, alternative finance providers and other non-bank lenders must be included so that thousands of small businesses with no relationship with traditional banks are not excluded.
“Finally, the Chancellor must consider measures where government loans for small businesses will be fully written off by the Government, if the money is used to rehire staff or pay rent, as in the USA. This would improve the survival prospects of businesses which will need time and space to recover.
“Unless the process of getting cash to businesses us expedited, the economy will be at serious risk, with estimates projecting four million people unemployed within weeks.
“The Chancellor must act now to help save local businesses!