The Press and Journal (Aberdeen and Aberdeenshire)
Call for urgent help to avoid job losses
Nearly a fifth of small firms will run out of cash within the next four weeks, research has suggested, as pressure mounts on the chancellor.
A report by the Corporate Finance Network of accountants predicts 18% of all struggling small companies will not be able to survive the next month due to the UK lockdown.
This could see nearly four million staff lose their jobs in May, it warned, adding as many as 42% of small firms could go bust if the lockdown lasts for four months or more.
This is despite Chancellor Rishi Sunak’s attempts to shore up the small business sector with a government-backed emergency loan scheme, widely criticised for failing to offer the support needed.
Banks have also come under heavy fire amid claims of unfair lending tactics under the scheme. Some are demanding personal guarantees from business owners and others want to apply high interest rates once the interest rate-free initial period ends.
The warnings have led the SNP to renew calls on the UK government to ensure businesses have access to finance now.
SNP Shadow Chancellor Alison Thewliss said it was crucial businesses can access funds in time.
She called for Rishi Sunak to urgently set out how the UK government will respond to concerns and ensure funding is delivered.
She said: “It is absolutely crucial that businesses across Scotland and the UK can access the finance they need now to pay their costs and stay afloat. This is an issue we have been raising for weeks.
“Thousands of small and medium-sized businesses are facing unacceptable barriers and delays, which could force them to close if they are not resolved urgently.
“The chancellor must outline how the UK government will respond to ensure firms get the cash they need.
“We cannot allow good businesses to go to the wall because support isn’t provided in time – that would be a disaster for the businesses, their staff and the wider economy.
“It is also important that the right financial support is available – with more grants as well as loans, to reflect the fact that businesses are losing income, not just seeing it deferred.
“People need jobs and businesses to go back to after this crisis. If we want to ensure the economy can get back up and running and prevent mass unemployment, the UK government and banks must act now.”