NHS engineer refused £250k lifeline by RBS
Crisis-hit firm makes vital kit for hospital beds
An engineering company which makes vital components for NHS hospital beds, generators and military aircraft has appealed directly to Royal Bank of Scotland boss Alison Rose after being turned down for an emergency loan.
Tufnol, which is based in Birmingham, asked natwest for a £250,000 loan under the Government-backed Coronavirus Business Interruption Loan Scheme.
With a bulging order book and 70 staff to support, it hoped the state-backed lender would be willing to help.
The firm also hoped that natwest – part of the same state - backed group as Royal Bank of Scotland – might extend it a lifeline given it makes components needed in the fight against the Covid-19 pandemic. One of its biggest orders is to make the ball bearings for the wheels on hospital beds.
Tufnol also makes parts for generators and military aircraft, including the composite lining on the windows of cockpits.
But the engineer was told it was not eligible for the loan because it was loss making before the crisis hit. The case highlights how huge numbers of firms around the UK are likely to be turned away for support they desperately need to survive the crisis, despite an overhaul by Chancellor, Rishi Sunak, to make sure banks provide more of these loans to viable companies.
Founders of dozens of leading British technology companies, including Deliveroo, Citymapper, Bulb and Blockchain have written to Sunak to complain they are unable to access the emergency loans which stipulates that a company must have made a profit in the year before the pandemic hit.
They told him they have invested in expansion and innovation in preference to ‘short-term profit’, meaning they have been unable to get support.
The Treasury revealed on
Wednesday that just 2,500 business interruption loans have been approved since the scheme was launched more than two weeks ago. In the same period banks have been swamped with more than 300,000 enquiries from firms desperate for support.
Business groups have warned that huge numbers of firms will collapse unless banks grant more loans and speed up the application process.
And now Tufnol has gone stright to the top to complain, writing to RBS boss Rose.
Managing director Roy Thomason, 64, said: ‘We are more than a viable business and have a huge amount of orders on our books – including to make components for hospital beds.
‘But we are struggling with cash flow. We need the loan to fund the raw materials.’
Thomason said the application for a £250,000 loan was supported with letters and copy orders from several of the UK’s largest manufacturing companies.
He added: ‘not so long ago, the public purse was used to bail out the banks – including RBS/natwest – at a time when they needed it most. They seemingly have short memories. I genuinely believe the Government when it says it wants to support industry through this crisis, but our bank remains unwilling.’
A natwest spokesman said: Unfortunately, not all businesses are eligible for the CBILS scheme. Exemptions include businesses that were experiencing financial difficulties prior to the current crisis, and in this case the business has been loss making for a number of years, with no capacity to service any additional debt.
‘We understand, however, that a small element of the CBILS loan was to be used in the production of ball bearings for hospital beds, and recognising the importance of this the bank is reviewing whether there is any support it can provide in these circumstances.’