Business Leader magazine has quoted The SME Tracker and comments from our Chairman, Kirsty McGregor’s in its article today, as the British Business Bank’s Recovery Loan Scheme comes to an end.
In The CFN & ACCA SME Tracker, accountants representing over 90,000 SME business clients, reported that 49% of their clients have been put off or have abandoned applying for finance in the past six months. Despite rumours of a new Recovery Loan Scheme, the British Business Bank has not yet finalised and published the details, resulting in a gap of this product in the marketplace once again.
McGregor said: “The cost of living crisis coupled with existing pressures from the turbulence of the pandemic have put a further strain on already struggling small businesses in the UK. With the existing SME Recovery Loan (RLS) Scheme coming to an end this Thursday, it’s crucial the government confirms upcoming support for SMEs sooner rather than later.
“SMEs are the backbone of our economy and without further support and initiatives, they risk being left behind. Already we are seeing in our research that one in five SMEs are planning to put growth on hold due to existing levels of debt and other financial pressures, which is alarming for the short and long-term future of this vital sector of the economy.
“The British Business Bank knew that their scheme was ending on 30th June. There are rumours of a further scheme but this has not yet been announced and lenders are not able to become accredited to provide a product for this scheme. There is no excuse for a gap in provision. Why has this not been resolved well in advance of the deadline, so that the new scheme continued from 1st July?
“When the first Covid-19 scheme was announced in March 2020, there were clear failings in the rollout and it was only due to our startling research showing how many businesses were running out of cash that the British Business Bank put in other measures to speed up approvals from lenders and subsequently also introduced the Bounce Back Loan. Since that date, 1.67 million businesses have utilised the various schemes and in their own report, the British Business Bank state that, had those schemes not been in place, up to 500,000 would have closed down.
“And yet it appears that the British Business Bank has still not learnt lessons from that period and is once again going to allow these schemes to lapse whilst they create a new scheme. This demonstrates inefficiencies in the extreme and a total lack of strategic leadership.
“Alongside continued support businesses need to ensure that they are actively exploring the options available to them and the government needs to ensure that these options are being made readily available for businesses who need them. Without this, we risk the future of the UK economy.”
The full findings from the June SME Tracker will be published next week.
