Many small and medium sized enterprises which are keeping up to 16 million people employed in the UK are struggling to access the Governments’ Bounce Back Loan scheme, while others are ineligible, say leading tax and advisory firm Blick Rothenberg.
Richard Churchill a business advisory partner at the firm said: “Whilst there have been many success stories there are still far too many occasions where businesses are struggling to access the funding. High volumes of enquiries have led to lenders websites crashing and difficulty in making a submission as well as delays in funding being received.”
He added: “Whilst more lenders have become accredited, these only total 17, compared with nearly 70 for the main coronavirus business interruption loan scheme. This means some businesses are struggling to access the funding.”
Richard said: “The Bounce Back Loan Scheme (BBLS) was a welcome measure by Government to speed up access to immediate critical funding of up to £50,000 to support UK Businesses.
“Small and medium sized enterprises (SMEs) are the engine room of the economy and keep around 16 million people in jobs. Over 95% of the approximately 6 million businesses are micro businesses. Individually they have less than 10 employees, in total they represent a significant portion of the workforce.”
Richard said: “however many of these are excluded from the BBLS. Borrowing is limited to £50,000 or 25% of turnover in 2019, meaning that they may have either just commenced trading and revenue is low, or they are involved in significant development before bringing their product or service to market, but they are not eligible for BBLS.”
He added: “Such practical restrictions are creating hardship, both for owners and employees –resulting in many SMEs becoming increasingly concerned about their ability to continue in the medium term, with day to day cash flow worries being the common theme. A recent survey by the Centre for Economics and Business Research (CEBR) suggested that over half a million UK businesses are concerned about insolvency.”
Richard said: “The government needs to act quickly and recognise the issues facing SMEs. Those that are eligible need to get the money quickly. The Government must look again at those who are excluded in order to prevent the increasing risk of business failure and associated rise in unemployment.
Richard added: “Given their size, the promised funding of up to £50,000 could make a real difference to these businesses.”