Since the Covid-19 lockdown began, small businesses have struggled. Many have been unable to pay employees sick pay and evidence suggested one fifth could go under.
The Chancellor has taken steps to mitigate against these impacts, but small businesses have described the support offered as patchy and restricted. On 2 April, the Chancellor updated government support and announced changes.
Stephen Morgan MP, who has been speaking up for small business amid the crisis, has responded to the Chancellor’s latest announcements. The city MP has welcomed the acceptance that previous support was not adequate but continues to highlight gaps in the package going forward.
The Coronavirus Interruption Loan Scheme (CBILS) before yesterday’s announcement yielded poor results with less than 1,000 out of 130,000 loans so far approved. The Government yesterday announced changes to this which only go part way in solving the issue.
Mr Morgan said:
“At this time of crisis, it is important that we all work together, and I am supportive of the Chancellor taking on board the calls from small businesses. However, I know from speaking to business owners that the original CBIL Scheme offered did not offer enough support to small businesses.
The scheme which some described as ‘fiddly’ placed too much weighting on power given to banks. This resulted in many small businesses in our community raising concerns directly with me around cash flow and loan application decisions.
I have been lobbying Government on this issue, highlighting the need for more comprehensive support packages and faster loan payments”.
The most important U-turn by the chancellor, Mr Sunak, is a change to the power held by banks. In their original CBILS banks were told that loans could only be offered to viable businesses that could not access finance on normal commercial terms.
Now “all viable businesses affected by Covid-19” will be eligible – taking on board Mr Morgan’s calls for more far reaching support.
While this issue does go part way supporting the city’s small businesses, no solution to the banks slow processing was offered.
Mr Morgan said:
“From speaking to small businesses in our community I know cash flow is one of the major issues faced. We all saw headlines earlier this week suggesting one fifth of small businesses could go under. The question we need to be asking is, do the chancellors new measures change this?
I am deeply concerned that a flood of lending was promised but is yet to happen. Banks claim that they are working flat out, but government must have processes in place that guarantee faster payments and an increased cash flow to small business amid this crisis. An issue of this importance cannot be left for the banks to run.
I will continue to keep a close eye on government’s steps to aid small businesses, we must work together to secure the future of our city’s business community”.
Stephen Morgan MP has been acting as voice for small business throughout the pandemic. Over three weeks ago he began discussions with the Federation of Small Business, has written to the Chancellor to highlight gaps in CBILS, has corresponded with the Solent LEP, raising issues in parliament and continuing to help with individual casework.
Some businesses may also be eligible for a Small Business Grant Fund. Government is providing additional funding for Local Authorities to support small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.
To find out more about this visit: www.portsmouth.gov.uk/ext/news/update-on-business-grant-payments
Information on how the Solent LEP is assisting business through this crisis can be found here: https://solentlep.org.uk/
Information on how Portsmouth City Council is helping small business can be found here: www.portsmouth.gov.uk/ext/coronavirus-covid-19/businesses-and-employers-coronavirus-information
Information on how Government is supporting small business can be found here: www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses