Small firms seek loan rules change

Business leaders are urging the Government to increase the guarantee on smaller emergency business loans

The Federation of Small Businesses say new figures show that 16,624 of the 36,186 small business finance applications for a Coronavirus Business Interruption Loan Scheme (CBILS) facility have been processed and approved.

The average value of a loan stands at £171,000.

FSB national chairman Mike Cherry said: “These figures mark an improvement but we need to see far more from the banks over the speed of processing applications and making money available to the smallest businesses.

“The average value of a CBILS loan stands at more than £170,000. Small shops, restaurants, gyms, manufacturers and mechanics at the heart of our communities are not seeking loans of anywhere near this size.

“The Government should up its guarantee on emergency loans with values under £30,000 from 80% to 100%.”

He added: “That, combined a the streamlined application process that should be in place for facilities of this size, should help to get more cash to the small firms that really need it.

“We appreciate that many banks need to make backroom adjustments to facilitate commercial loans worth under £25,000 due to the Consumer Credit Act, but t’s important that these adjustments are made swiftly.

“We continue to hear from small firms that made enquiries when this scheme launched but have still been unable to make an application because of unresponsive customer service teams.