Independent retailers are reportedly facing delays in accessing government loans, which were designed to provide short-term cashflow for companies that were told to shutdown with four hours’ notice amid the Covid-19 outbreak.
The British Independent Retailers Association (Bira) said that without the funding lifeline, thousands of independent retailers would not be able to replenish stock and would have nothing to sell when high street shops can re-commence trading after lockdown ends.
Consequently, experts have warned that up to a third of indies may struggle to reopen once lockdown is lifted.
In a statement published by the Retail Gazette, Andrew Goodacre, Bira chief executive, said: “The delays are just horrible for retailers, for any business, and they are rapidly running out of cash, it is as simple as that. Those loans were designed to provide short-term cashflow for companies that were told to shutdown with four hours’ notice. But they are just not coming through.”
There are other reports from industry leaders that the Coronavirus Business Interruption Loans (CBIL) are still not coming through – and that the process for applying for the loans can be demanding. Plus, many have reported that banks have been slow to respond to enquiries about the formal application stage.
Reports have suggested that £3bn worth of CBIL loans have been paid out.
London Chamber of Commerce and Industry boss Richard Burge has urged banks to offer all existing business customers interest and fee-free overdrafts for the next six months while they waited for CBIL loans to be approved.
Meanwhile, shadow business secretary Ed Miliband has advised the government to speed up the loans process by increasing its underwriting guarantee from 80 per cent to 100 per cent of the advance, as is the case in Switzerland, where he says they have paid out 12 times more money in business loans in one week than the UK has in three.
Writing in the Evening Standard, Ed Miliband said: “This complete underwriting by government would take the risk off the shoulders of the banks.
“The process of underwriting needs to be simplified — in Switzerland it’s a one-page form.”