Technology companies call for coronavirus support to be extended
Some of the UK’s fastest-growing technology companies have written to the Chancellor to warn they risk getting left out of government-backed support to help businesses through the coronavirus crisis.
The bosses of Deliveroo, Citymapper and Bulb were among 12 chiefs who have asked the Chancellor to meet leading technology companies to find a way to include them in coronavirus support schemes.
The businesses say they are excluded from both forms of government-backed loans that the Chancellor announced last month.
The companies’ revenues are too large for them to access loans from the government’s Coronavirus Business Interruption Scheme. The loans are paid by regular high-street lenders, but backed by the Treasury.
Bigger firms are meant to be able to access the Bank of England’s Covid Corporate Financing Facility. However, businesses need to have an investment grade credit rating to access this, a time-consuming process that many newer companies have not yet gone through.
“As innovative companies we build technology and systems that transform sectors. For customers, we drive costs down, standards up and for society we create whole new categories of products and services. We are vital to productivity, clean growth and UK exports,” the letter read.
“We are concerned that unless urgent changes are made to the current schemes, then the high-growth UK tech sector will be put at risk.”
The signatories include the founders and chief executives of Babylon Health, BenevolentAI, Blockchain.com, Darktrace, Faculty, Five AI, GoCardless, Graphcore and Improbable.
“We are therefore writing to ask you to urgently set up a taskforce meeting of leading tech businesses to work with you and your officials to find a way for high-growth tech companies to be able to access the lending schemes you have already established or new schemes if necessary,” they said.
A spokesperson for the Government said: “We’re taking unprecedented action at speed to support businesses, jobs and our economy.
“This includes £330 billion in business loans and guarantees, paying 80% of furloughed workers’ wages, tax deferrals, and introducing cash grants of up to £25,000 for small companies and covering the cost of statutory sick pay.
“The tech sector is a central pillar of the UK economy, and we recognise there are significant cash-flow challenges for high growth and early stage technology companies.
“We are working urgently in Government and with the venture capital finance sector to assess these issues and consider how to best support them.”