Mark Menzies demands banks back business

Fylde MP Mark Menzies has raised concerns over the banks’ handling of the Coronavirus Business Interruption Loan Scheme.

The Government has put the scheme in place, as part of the largest package of state aid for businesses, to ensure firms survive through the Coronavirus pandemic.

The loan scheme provides funds of up to £5 million, interest free for 12 months, to small businesses.

Mr Menzies said: “I am concerned that not enough businesses are being offered these loans by the banks. It is vital they get this funding to remain in business and be able to start up again once the lockdown is relaxed.

“But I have been told by several small business owners the banks are treating these funds like loans from themselves and are applying far too strict requirements.

“This is Government funding being administered by the banks. They should be helping applicants through this process and getting that funding to where it matters and quickly.

“I have written to the Chancellor to ask what steps the Government can take to get the banks to act faster and get this funding to where it matters – the small businesses which are the core of our towns and villages here in Fylde.”

The Coronavirus Business Interruption Loan Scheme (CBILS) supports small and medium-sized businesses, with an annual turnover of up to £45 million, to access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years.

The government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees. This means smaller businesses will benefit from no upfront costs and lower initial repayments.

The Government will provide lenders with a guarantee of 80 per cent on each loan to give lenders further confidence in continuing to provide finance to small and medium-sized businesses. The scheme is delivered through 40 commercial lenders including all the major banks, backed by the Government-owned British Business Bank.