Businesses are being locked out of Government coronavirus support because their banks have not signed up to loan schemes that have been backed by the Treasury, a senior business figure has warned.
Adam Marshall, head of the British Chambers of Commerce, said companies struggling under the weight of the coronavirus lockdown and the resulting economic fallout are not being given the help they need.
Chancellor Rishi Sunak has promised to do whatever it takes to help British businesses stay afloat during the Covid-19 pandemic, as people are forced to stay inside.
The Treasury said it would sign a 100% guarantee to step in should small businesses default on bounce-back loans to their normal banks.
The loans give firms a much-needed cash injection of up to £50,000, and banks have already handed out more than £26 billion under the scheme.
But Mr Marshall told MPs on the Treasury Select Committee that the support is not reaching everyone.
He said: “Some businesses who have been customers of non-accredited lenders have felt that they were locked out of the bounce-back loan scheme because the accredited lenders were spending most of their time servicing their existing customer base… rather than being able to take on applicants from outside their business itself.”
.@BCCAdam told us that many hospitality companies have told the @britishchambers that they can't afford to do 2m stickers for the floor if it's going to change to 1m shortly. pic.twitter.com/KanQtjhD9b
— Treasury Committee (@CommonsTreasury) June 17, 2020
However, he stressed most companies have found the bounce-back loans rapid, with money coming into their accounts within days.
The scheme was designed to create as few hurdles as possible for companies, with banks only required to do bare minimum checks on the firms they lend to.
This sets it apart from two larger schemes, the coronavirus business interruption loan scheme (CBILS) and CLBILS – its sister scheme for larger companies.