Industry leaders warned funding for firms forced to the brink of collapse by Covid 19 “must get out the door faster” to make sure smaller companies survive the crisis. More than a quarter of Britain’s workforce has now been furloughed and 24 percent of firms have temporarily stopped trading. Chancellor Rishi Sunak’s business interruption loan scheme picked up pace after a sluggish start, according to lenders’ trade body UK Finance.
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It recorded £1.45 billion increase in lending in a week, taking the total so far to £2.8 billion.
Businesses have made 36,000 applications to lenders for help and 16,624 have been successful.
Rain Newton-Smith, chief economist at the Confederation of British Industry, said progress was being made but more must be done.
She added: “While the pace is picking up, many firms are still missing out. More loans must get out the door faster for the businesses facing distress, especially smaller businesses.
“Finding quicker and simpler routes for smaller firms to access cash, and extending repayment schedules to encourage more businesses to take them up are two ways that could make a difference.”
Suren Thiru, head of economics at British Chambers of Commerce, warned a “concerningly high number” of businesses are still finding the process too complex.
He said: “The number of applications processed and approved will need to be increased significantly in what is a crunch week for firms urgently trying to access financial support.”
Closed shops on Cowbridge Road East in Cardiff (Image: Matthew Horwood/Getty Images)
Chancellor Rishi Sunak (Image: PA Video/PA Wire/PA Images)
Mike Cherry, Federation of Small Businesses national chairman, said the figures mark an improvement but said banks must speed up the process.
“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,” he added.
“For those that have made an application, the process is very slow.”
Institute of Directors chief economist Tej Parikh called for banks to publish how many loans they are approving.
“More transparency around data would be welcome. Knowing which banks are lending least would provide insight into what’s holding things back on the ground,” he said.
Firms have applied for 3.2 million workers to be furloughed since the start of the coronavirus outbreak, HM Revenue & Customs (HMRC) figures showed.
It said that 435,000 applications have been made to the Government’s job retention scheme since it opened earlier this week.
Around £3.75 billion worth of applications had been made for the scheme by midnight on Wednesday.