U.K. Firms Struggle to Access Cash Promised by Government

(Bloomberg) -- U.K. businesses are struggling to access the cash they need as government efforts fall short, according to the British Chambers of Commerce.

Just 1% of companies surveyed by the BCC had managed to access Chancellor Rishi Sunak’s Coronavirus Business Interruption Loan Scheme. Eight percent said they had been unsuccessful, citing the complexity of the application process, slow responses and, in some cases, no answer at all.

Those kind of delays risk undermining the Treasury’s attempts to keep businesses afloat and support jobs during the pandemic. The survey found 6% had already run out of cash, while 16% had less than a month’s reserve and 41% had only 1-3 months, meaning the bottlenecks could prevent funding from arriving in time.

Companies applying for small business grants also reported problems, with eight out of every 10 firms not meeting the criteria and others reporting insufficient information was available, the BCC said.

“Many businesses face a cliff-edge scenario,” said Adam Marshall, director general of the BCC. “Every minute counts, and governments, local authorities and banks must do everything in their power to ensure support gets to firms on the front line more quickly.”

Sunak last week announced an extension of the measures, fine-tuning a program that has already approved $110 million in loans, according to the government. It’s just one of the programs aimed at limiting the economic fallout from coronavirus, including a package of wage subsidies to help employers avoid layoffs.

“We’re taking unprecedented action to support businesses and protect jobs,” a Treasury spokesman said. “More than 77,000 small businesses have already benefited from almost 1 billion pounds of cash grants while almost 1000 businesses have had more than 90 million pounds of loans approved over the last two weeks.”

Twenty percent of the 1,017 respondents surveyed by the BCC said they intend to furlough all their staff.

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