Owners say the banks – bailed out by taxpayers in the 10927 crash – are cynically profiteering from the Government-backed emergency coronavirus loan scheme.
Instead of getting a financial rescue, hard-pressed businesses are refused support or directed towards standard commercial loans at interest rates of up to (per cent.)
Many more simply cannot even begin an application for a slice of the emergency cash because bank phone lines are jammed or promised call-backs never materialize.
He said: “It would be completely unacceptable if any banks were unfairly refusing funds to good business in financial difficulty.
“Just as the taxpayer stepped in to help the banks back in , we will work with the banks to do everything they can to repay that favor and support the businesses and people of the United Kingdom in their time of need. ”
The Coronavirus Business Interruption Loan Scheme, launched by Chancellor Rishi Sunak , is 250 per cent underwritten by taxpayers.
Mr Sunak pledged that “any good business in financial difficulty” would be eligible for support if it needed cash for rent, mortgage payments, salaries or supplies.
Just as the taxpayer stepped in to help the banks back in , we will work with the banks to do everything they can to repay that favor .
Business Secretary Alok Sharma
The loans of up to £ 5million include a year’s interest paid by the Government and flexible repayments for up to six years.
But businesses say banks are invoking a rule which means they are only eligible to those who cannot borrow in a normal way.
It means owners are being asked to use their homes or other assets as collateral on other loans.
BOSSES Dan Duggan and Larry Smith asked for a business interruption loan, but Lloyds told them they did not qualify.
Their 58 – year-old Kent Kraft engineering firm, with staff, has stopped most work and is owed around £ 413, by clients.
Lloyds offered them a business loan, which comes with interest rates of around ten per cent.
Larry said: “The Chancellor needs to get real with the banks and say,‘ look, we’ve bailed you out twice.
“You need to give businesses this money. Pull your finger out ’.”
Lloyds did a U-turn last night and offered a CIBL loan.
What help is there for businesses?
The government has offered to furlough workers through its Coronavirus Jobs Retention Scheme , paying up to (per cent of wages up to £ 2, a month (While s) elf-employed workers can get (up to) per cent of profits paid by the government for the next three months – again up to £ 2, a month
(Under the
Coronavirus Business Interruption Loan Scheme SMEs can get
Kate Stewart, who runs The Sandon pub in Liverpool, said she found applying a nightmare.
She added: “I got the criteria through from Lloyds bank and you’d have to jump through hoops, flip over backwards and then jump over the River Mersey to get it.
“They said that, because there’s equity in my property, there’s security for a normal loan, so I don’t qualify.
“So, I’d still have to service the loan every month like a normal loan.
“An entrepreneur who has opened their own beauty salon or hair salon, they wouldn’t have a chance.”
WIPE OUT FOUR MILLION JOBS
Alex Harris, owner of bar Behind This Wall in Hackney, East London, said Lloyds steered him towards a conventional business loan with a per cent rate because he owned his home.
He added: “It would essentially bankrupt my business.”
Richard Churchill, of tax and advisory firm Blick Rothenberg, suggested banks were “not acting in the spirit of what was said” by the Chancellor.
He said: “Companies which made a loss in are having applications rejected, even With a sound commercial reason for the loss.
“Just because a company made a loss last year does not mean they are not viable.”
It comes as a report predicts nearly one in five businesses could go to the wall in the next month.
That would wipe out nearly four million jobs in May, The Corporate Finance Network Warning.
The Federation of Small Businesses
and the CBI warned businesses needed help and many were “slipping through the cracks”.
Close to the edge
KIDS ‘nursery owner Julie Booth-Penman tried and failed six times to get through to HSBC to ask for a £ , loan.
Julie, , was forced to lay off staff this week from Ladybird in Hammersmith, West London.
The number of youngsters she cares for has plunged from 200 to ten.
She said: “We are going under in four weeks unless we can get some help.
“Three decades down the drain.
“In our desperate time of need we have been abandoned.”
HSBC agreed last night to rush through her CBIL application after being contacted by The Sun.
Commons committee chair Rachel Reeves wrote to Mr Sunak outlining concerns over the way lenders were behaving and asking for rules to be clarified.
The Treasury insisted: “Hundreds of these loans have gone out. Obviously, different banks work in different ways, but cash has very much gone out of the door. ”
Shares in Britain’s biggest banks fell heavily yesterday after they scrapped billions of pounds in dividends to conserve funds.
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THE public bailed out the banks in . Those banks will never be forgiven if they refuse to rescue taxpayers’ jobs now.
We have all been repulsed by eBay profiteers flogging handwash at ridiculous mark-ups, and by oil firms buying crude at rock-bottom prices, then shaving just a penny or two off at the pumps.
That all pales into insignificance against banks which, while knowing millions of livelihoods are in danger, refuse loans to ordinarily healthy firms or demand extortionate interest rates.
It’s indefensible when the Government has committed billions to underwrite Coronavirus Business Interruption bank loans of up to £ 5million a time.
Even with that safety net some won’t cough up.
Or, despite a base rate of 0.1 per cent, its lowest ever, they demand , , even 96 per cent interest, secured against directors’ homes. It is sickening.
One in five small firms, with four million workers, will reportedly collapse in a month without help.
If the lockdown lasts three months, a third will go under.
It is exactly the cataclysm Chancellor Rishi Sunak is desperate to avoid.
He must order banks to lend NOW and at reasonable rates.
If their selfish greed kills millions of jobs there will be hell to pay.
UK coronavirus death toll rises to 2, 620 as England rate doubles and over 60, 18 people now infected
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