There is not a huge amount of love around for the banks at the moment it would seem. And I can understand why,

Here are a couple of comments sent to me this week.

◾️'I have tried twice to contact HSBC. Both times I have been told I I’ll get a call back and I have not heard back at all. They say I will get a call back within five working days and my first attempt was approx 10 days ago. Typical of banks, no support at all, and disgusting as have been a business customer for over 28 years!’

◾️'Two conversations with banks so far (Lloyds and Santander) all look to be a no go in the pre-calls before applying but they have said “apply anyway”. We’ve never had support from banks in growth over the last 10 years so we don’t expect them to help us now.’

My own thoughts having now read feedback from and spoken to levy payers regarding the corona virus business interruption loan scheme (CBILS)

• In our original article a week ago I said I was encouraged by the chancellors announcement but that the test would be how quickly the promised cash materialised in the bank accounts of businesses.

• The anecdotal evidence from surveying our levy payers suggests that for the majority of SME’s the scheme so far is not delivering

• Problems are that the delivery of CBILS has been given to banks and the government pledge of £330bn is not is not new money for them to lend merely a fall back guarantee if the borrower defaults

• The terms of the CBILS limits lending to loans that would be viable lending propositions but for Covid 19

• Because the banks are lending their own money with a government guarantee and treating it like any other loan application they are asking for budgets and cashflow projections to show the loan is viable

• Many businesses cannot produce such cashflow forecasts as they have little or no cashflow as a result of the lockdown. What they are looking for is access to cash to replace the lost turnover

• Levy payers who responded report that lenders are not even responding to enquiries, calls are not returned and progress if at all is painfully slow

All of the evidence indicates that the CBILS has failed utterly to assist SME’s in need who have lost in many cases a significant part if not all of their turnover.

The scheme for large businesses is apparently working and despite returning £170m to its shareholders in dividends last month Easyjet appears to have secured £600m in loans.

This appears to bear out my belief shared by many that there is yet again a complete failure at the heart of government to understand the pressures facing SMEs.

It was reported yesterday that the job retention scheme is estimated to cost the treasury £30-40bn over the next three months. Whilst that support is vital and appreciated it will be of questionable value if there wholesale business failures in the SME sector which mean that those furloughed employees will no longer have jobs to return to when the lockdown ends.

My message to the chancellor is blunt. Unless CBILS starts delivering much needed cash to SMEs in all sectors within days rather than weeks there is likely to be a wave of businesses falling into insolvency. It is already happening.

The government has quite rightly taken a policy decision to supress business activity to protect public health.

However the businesses affected should not have to bear the cost of that policy decision and I urge the chancellor to abandon CBILS for businesses with turnover under £10m and introduce urgently a system of grants which should be no rpayable and equal to eight weeks’ turnover.

Martin Davies

Chairman

Bournemouth Town Centre BID