Key results from the 5th weekly BCC Coronavirus tracker:
- Loans schemes are still far too slow in delivering cash to businesses who need it urgently
- The governments furlough scheme is preventing redundancies, 76% of those surveyed had now furloughed employees a rise of 5% on the previous week-this may be in part due to HMRC’s portal system going live last Monday
- Only 13% of all firms who attempted to access CBILS had been successful, a rise of over 10% from last week’s figures with a majority still being unsuccessful or awaiting results
- UK Finance figures published this week indicate that over £4bn of loans have now been paid out under the CBIL scheme with lenders receiving 52,807 completed applications so far with 25,262 of these applications have been approved
The Bounce-Back Loan Scheme (which goes live Monday 4th May ) will allow businesses to receive loans of up to £50,000 via the CBILS which will be 100% backed by the government and interest free for the first 12 months.
Following the latest reforms the largest lenders have announced they will not require forward-looking financial information and will only ask businesses for information and data they might reasonably be able to provide at speed.
It is hoped that this in turn should ease the application process and assist lenders in providing financing to businesses who need it as quickly as possible.
There are now 52 British Business Bank accredited lenders which should mean businesses can now access financial support a choice of firms.
Many firms struggling in the current climate do not intend to access CBILS due to concerns that they may be unable to repay the loan:
- Of those surveyed by the BCC , 57% of firms did not intend to apply for CBILS or other finance
- Of those not applying, 30% of the most cash-strapped firms say they could not re-pay CBILS loans
Access to financial support:
Cash reserves remain a key concern for many businesses, with 51% of firms saying they have three months’ cash in reserve, down from 59% on the previous week.
Of those surveyed in our Shropshire tracker the figure was 62%.
Firms have been benefiting from the wider packages of government support:
- Business support grants (23%)
- The expansion of HMRC’s Time to Pay initiative (13%)
- Three-month deferral on VAT (29%)
- Business rates relief for the retail, hospitality and leisure sector (16%)
Finance for cash-poor firms:
The data collected by The BCC suggests demand for finance is higher among firms with three months cash in reserve or less.
Businesses furloughing employees:
The number of firms that had furloughed a portion of their staff rose to 76% as the scheme went live. This is an increase from 71% last week and 66% the week before.
In Shropshire of those surveyed in our latest tracker 79% had furloughed members of staff.
Thankfully, The BCC tracker results showed almost no redundancies had been made by the businesses surveyed, demonstrating the importance of the furlough scheme in preserving jobs.
Having a greater online presence, managing cash flow and accessing additional information on returning to work were all themes which the respondents from our latest survey cited as crucial in assisting businesses following the crisis.
The Chancellors new loan scheme is a welcomed move by The Chambers of Commerce network and should help to provide a financial lifeline for many small and medium sized Shropshire businesses struggling through the current crisis.
BCC Director General Adam Marshall said on the new loan scheme, ‘it may become necessary for the government to consider grants, rather than loans, for some of or hardest-hit firms-who are concerned about taking on debt amid unprecedented economic challenges’.
A review of the lockdown measures will take place next week. Making sure businesses can survive whatever the outcome of the review must be central to any government policy moving forward. Businesses need clear guidance on the steps that the government plans on implementing in the future and for businesses who do return to work they require greater guidance on operating safely within the workplace as well as on social distancing.