Firms struggling to secure lifelines

STRUGGLING firms which applied to their bank for an emergency business loan last week were eight times more likely to be rejected than approved, according to the British Chambers of Commerce (BCC).

The lobby group warned support to help companies survive the Covid-19 crisis is ‘only starting to reach firms’, as it released results of a survey of more than 1,000 members.

Just 1pc of firms successfully applied for the new business interruption scheme last week, while 8pc of firms were turned down.

The poll also showed only 7pc had received new grants from their local council which have been made available to small High Street firms, including handouts of up to £25,000 for those in the retail, leisure and hospitality industries.

Twice as many – 14pc – were turned down for the grant, with most told they did not meet the criteria. The survey was carried out between April 1 and 3, when Chancellor Rishi Sunak announced a major overhaul of the business interruption loan scheme.

Companies had complained that they were being routinely turned down for these Government-backed

loans, which are interestfree in the first year, and offered the bank’s own, more expensive loans instead.

The BCC report underlined just how urgently many firms need cash. It found 57pc of firms have three months of cash in reserve or less, while 6pc have run out of money.

Dr Adam Marshall, director general of the BCC, said: ‘Many businesses face a cliff-edge scenario, either at the end of this month or over the course of the next quarter.

‘Our research suggests that support is only starting to reach firms on the ground.’