‘Too many businesses still missing out’ says IoD chief on latest coronavirus business loan figures
Responding to latest UK Finance statistics on lending through the Coronavirus Business Interruption Loan Scheme (CBILS), Tej Parikh, Chief Economist at the Institute of Directors, has said that he feels too many businesses are still missing out.
He comments: “It is positive to see the scheme ramping up, but cash still needs to get to more businesses quickly. Reforms have started to bed in, and more money is getting out the door. However, there are still swathes of businesses facing processing delays and restrictive viability criteria, and many are reluctant to engage with the system at all.
“The Government must consider reforms to improve the scheme, from raising its backing of small loans to helping more non-bank lenders play their part. To help those unable to access the scheme, we need to explore how to make the affordability criteria clearer, more consistent and less stringent, while looking at other routes such as overdraft facilities.
“More transparency around data would be welcome. Knowing which banks are lending least would provide insight into what’s holding things back on the ground.”
Also responding to the news that over £2.8 billion has been given so far through the Coronavirus Business Interruption Loan Scheme (CBILS), Rain Newton-Smith, CBI Chief Economist, comments: “These figures show that much needed finance is reaching more and more businesses, particularly larger firms. The Government and the banks are putting the shoulder to the wheel in unprecedented times.
“But while the pace is picking up, many firms are still missing out. More loans must get out the door faster for the businesses facing distress, especially smaller businesses. Finding quicker and simpler routes for smaller firms to access cash and extending repayment schedules to encourage more businesses to take them up, are two ways that could make a difference.
“Saving jobs now will be far more cost effective in the end than trying to replace jobs lost.”