Welcome to the May 2020 'Need to Know' update. You'll find the latest key information on the Coronavirus crisis, support form Government, FSB advice that is available, and the latest developments.
New figures reveal amount of support
New Treasury figures show that 69,000 bounce back facilities worth over £2 billion were approved during the first 24 hours of the Bounce Back Loan Scheme (BBLS).
Federation of Small Businesses (FSB) National Chairman Mike Cherry said: "“For many, loans are not the right solution and it is understandable that small business owners are reluctant to take on debt. But we have heard from many members who wanted easier access to loans to get them through this awful period in the short term.”
“The BBLS has come out of the blocks strong – enabling £2 billion of small business lending in its first day, a sum that took its predecessor loan scheme weeks to achieve.
“Given the nature of this initiative, and the sheer volume of day one applicants, it was always going to be led by the big four in its early phase.
“From here though, it’s important that efforts to increase competition in the small business banking market are maintained. More banks and alternative lenders need to be accredited to the BBLS. The Treasury, British Business Bank and Bank of England should work together on how this can be best achieved."
You can read more on this at: https://bit.ly/3cdaplY
Less than half of budgeted grant funding has reached Scottish firms
The Scottish Government has released figures showing that £526 million of coronavirus grant funding has been released to 45,387 Scottish businesses.
However, official correspondence from the Scottish Government to the Scottish Parliament’s economy committee shows that Ministers have budgeted for more than £1.2 billion worth of grants, though some elements of this grant funding isn’t yet open to application.
The statistics show that across Scotland 74,216 grant applications have been received by councils and that some Scottish local authorities are processing grants far faster than others.
The Federation of Small Businesses (FSB) in Scotland urged councils and the Scottish Government to develop a consistent approach in relation to grant applications and highlighted the original 10 day target for payment.
Andrew McRae, FSB’s Scotland policy chair, said: “This data shows an additional £300m has reached firms in the last fortnight. That’s the most important thing when this money could make the difference for operators up and down Scotland.
“But less than half of the money allocated towards grants has got to businesses. And these figures show that some councils are getting this lifeline funding distributed far faster than others.
“When Ministers originally promised a 10 day turn around for this cash, you can understand the frustration of some smaller Scottish businesses who are running out of road. It isn’t good enough for some councils to have hundreds or even thousands of local businesses waiting for their grant to process. Therefore we need to see councils and the Scottish Government redouble their efforts and deliver a speedier, more consistent approach across the country
“In addition, policymakers need to take a more proactive approach to ensure that everyone in need of a grant receives one. For example, what steps are Ministers taking to ensure migrant entrepreneurs get the help they might need?
“While many businesses are thankful for the help they’re being offered, there’s obviously a huge amount of work required to ensure Scottish businesses get this lifeline help before it is too late.”
You can get the latest Scottish update here; https://bit.ly/2Wh02H7
Help must continue to prevent collapse of thousands of small firms
The first set of figures from the Insolvency Service for Q1 of 2020 showed that both individual and company insolvencies decreased, and the number of individual bankruptcies rose. The figures largely pre-date the Government lockdown and wider impact of the Coronavirus (COVID-19).
But analysis going deeper into the crisis by the Enterprise Research Centre has warned of a “pincer movement” with a surge in limited companies going bust being mirrored by a drop in new firms setting up.
FSB Chairman Mike Cherry said: “Crucially, the Job Retention Scheme, which is helping to keep money in the pockets of employees while safeguarding the long term future of small businesses, is doing a robust job. But for certain sectors, the restrictions on gatherings and the scale of the lockdown will mean that some staff will face the possibility of furlough for a lengthy period.
“That is why the Government must continue to constantly provide support in this way until the crisis ends. But it’s vital that as some industries do return to work, in what is likely to be done in stages, that the Job Retention Scheme reflects that too. Business owners should be able to bring full time staff back to work for a few days a week – whilst still using the furlough system for days when staff are not required – as they gradually resume business as usual.
Read more on this story here: https://bit.ly/3d1L0eP
FSB lobbying for small business needs during Coronavirus crisis
FSB continues to lobby Government on all areas of the economic response to Covid-19, including Special Advisers in No 10 and the Treasury, Parliamentarians of all parties, and central Government departments.
A spokesperson explained: “We are taking up a raft of issues with different departments and MPs, now that Parliament has returned in semi-virtual format and the Job Retention Scheme live, that have been raised by our membership: pressing the case for action on issues like extending grant money to small businesses who currently find themselves outside the eligibility criteria, nailing down issues with CBILS (in particular pressing on the 80%-100% underwriting guarantee), and delivering some form of flexibility within the furlough scheme that makes sense as we eye recovery for our businesses.
“We have written to members of Sir Keir Starmer’s Shadow Cabinet team, including the Shadow Business Secretary and the Shadow Small Business Minister, as well as their staff regarding subject updates about Covid19 business support.”
You can get more help and advice from the FSB’s Coronavirus hub here: https://bit.ly/3aQy6Pt
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