In the UK, 46% of applicant companies have received loans via the Coronavirus Business Interruption Loan (CBILS), well below the 98% approved by the equivalent scheme in Germany, according to the TaxPayers’ Alliance
In the UK, 46% of applicant companies have received loans via the Coronavirus Business Interruption Loan (CBILS), well below the 98% approved by the equivalent scheme in Germany, according to analysis by the TaxPayers’ Alliance.
Overall, as of 22 April, 16,624 UK companies have successfully received loans, with an overall value of £2.8bn, compared to 13,000 in Germany, with a combined value of £7.4bn.
In Switzerland, more than 100,000 loans have been approved through the equivalent scheme, with a total value of £13.3bn.
A comparison of the three countries’ schemes showed that not only were the terms more onerous in the UK, but also that less money was paid out.
Among UK businesses, 59% are estimated to have less than three months’ cash in reserve, according to the British Chambers of Commerce.
This has been exacerbated by the slow rate of approval of loans by the 40 approved UK lenders.
The TaxPayers’ Alliance reported that, although increasing the guarantee from the government to 100% might speed up access to finance, without changes to lending criteria, businesses might still not survive.
In Switzerland, analysis found that loans were often paid within 30 minutes; a clear estimate for the UK time period for CBILS approval has not been provided by government but has been suggested to be around four to six weeks.
Duncan Simpson, research director at the TaxPayers’ Alliance, said: Offering 80 or even 100% taxpayer-backed guarantees misses the point if there are other reasons companies can’t access CBILS cash in the first place, which have led to the UK system lagging behind other European schemes.
The scale and speed of support provided to companies in both Germany and Switzerland shows that red tape seems to be delaying the loans, and potentially putting the economy at risk by setting the bar too high, Simpson said.
The scheme needs to be streamlined and rather than trying to use the application process to protect against false claims, the government should fall back on more stringent legal measures to fine and prosecute those who try to cheat taxpayers, he said.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.