Downing Street is expected to announce a range of additional measures to support businesses through the coronavirus crisis – but has been warned ‘speed is of the absolute essence’ to keep firms afloat.
Whole sectors are in crisis with the government yesterday urging people to limit social contact and avoid ‘pubs, clubs, restaurants and theatres’.
Industry bodies have today warned this will result in ‘hundreds of thousands of job losses’ in these sectors, while other firms struggle too as people limit travel and spending.
And although Chancellor Rishi Sunak has already announced a £12bn package of Covid-19 business support in his Budget, further measures are expected – and demanded – today.
The government is facing calls to match the robustness of the French and German support packages, where assurances have been given that businesses will be helped to survive beyond the outbreak.
Here in the UK, businesses and support organisations have called for a similar approach to ensure the economy and industry can remain healthy.
OakNorth Bank has urged the government to implement a range of short and medium-term measures to safeguard businesses – and warns they are ‘running out of time’ to get it right.
The bank said: “The British Business Bank’s Coronavirus Business Interruption Loan Scheme announced in last week’s Budget is insufficient for two key reasons: it is not available to new entrants and none of the criteria has been changed from the Enterprise Finance Guarantee Scheme.
“For this scheme to have the desired impact: it needs to be available for all SME loans up to £2m, not just £1.25m; it should be based on relaxed eligibility criteria which enables quick drawdown (with automatic eligibility for all loans which were not already stress cases before the crisis; and it should be open to banks such as OakNorth Bank, which has in its four-and-a-half years of existence, clearly demonstrated its support for SMEs.
“This scheme needs to be deployed this week as businesses are running out of time – as Hospitality UK (which represents restaurants, hotels and bars) warned this morning, the hospitality and leisure industry is ‘four to six weeks away from running out of cash’ and the country is facing ‘hundreds of thousands of redundancies’ without urgent action.”
And SME financer Liberis agrees swift and substantial action is needed.
CEO Rob Straathof said: “The Chancellor has announced a great initial support plan for UK small businesses, but in light of recent government announcements to tackle the Covid-19 virus, we strongly urge the government and the British Business Bank to roll out a similar ‘bazooka’ approach as Germany and France.
“The measures announced yesterday evening will mean the entire bars, restaurants and hospitality sector including hair and beauty salons and gyms will face a few weeks or even months of 50-100% haircut on revenues.
“We urge the Chancellor to enable a sizable £50-100bn plus fund for UK business support, set up and governed by the British Business Bank, but speed is of the absolute essence.
“This needs to be set up within two weeks and able to fund those most in need, preferably through existing British Business Bank lenders to speed it up.
“We also need to optimise the well-meant policies such as PAYE tax postponement where HMRC will charge you interest.
“Businesses could end up going out of business unless the Government sets out a clear, accessible plan.”