ON 2 APRIL, Chancellor Rishi Sunak MP announced changes to the government’s Corona Business Interruption Loan Scheme (CBILS), vowing to take ‘all action necessary’ to make sure government backed loans were benefitting businesses as planned.
But only a month later, the FTA, has called on Mr Sunak to make the scheme work for businesses across the logistics sector, many of which are currently being stalled or ignored by lenders.
David Wells CEO of FTA, explained. ‘The CBILS application process needs to be faster and transparent, so that businesses can receive the vital support they are entitled to under the scheme without delay.
‘According to FTA’s own polling of businesses, nearly a quarter of all logistics companies told us they face potential collapse in the next eight weeks, with 80% needing better access to CBILS to survive.
‘These figures are very concerning. Businesses across our sector have seen a major decline in revenue, for some up to 100%. And these organisations have only survived thus far by deferring payments of VAT, PAYE, NI and asset lease payments.
The Chancellor told businesses he would ensure that the £330bn of government support promised would reach as many businesses in need as quickly as possible. Our message to him is that, for the logistics industry, the time for this support is now.
‘In addition, the numbers simply do not stack up: UK finance has disclosed that £2.8bn has now been lent across 16,600 businesses, with a daily dispersal of £300m in 1,785 loans.
Yet we have also been told that only 36,000 businesses have applied for a CBILS loan – which seems very low compared with the 16 million private organisations currently operating in the UK.
‘According to our own industry survey, around 25,000 of those looking to apply are logistics businesses! And when you compare these figures to France, where £17.5 billion of loans have already been approved for more than 170,000 businesses, you can see how far behind the UK scheme is.’
According to David Wells, it would appear that red tape is preventing many businesses from taking advantage of the programme.
‘With so many organisations wanting to access the scheme but not yet being counted in the number of applications, we can only assume the current quoted number of applications is so low because businesses have not managed to get past the banks to formally make an application.’