The Federation of Small Businesses (FSB) has stated that its data shows many smaller firms are having difficulties securing cash via the new Recovery Loan Scheme.
A Financial Times report indicates the number of companies that have applied under this scheme is currently within the “low thousands”. The banks that have been charged with lending to businesses under the scheme are stating a combination of interest rate levels that are higher than under the Bounce Back Loan Scheme and credit checks that are more stringent account for this slow response.
The Financial Times states that, during the first couple of days after the loans launched, one top bank did not even get 500 applications – compared with nearly 2,000 during the same period for the Bounce Back Loan Scheme.
The report also suggests that a lot of the businesses that managed to apply for one of the loans and were turned down are ones that have successfully applied to previous government loan schemes.
According to Small Business, Craig Beaumont from the FSB responded to these figures by saying:
“The Government should be throwing everything it’s got at getting businesses across this ‘unlock’ phase and into the recovery, to avoid businesses falling at the final hurdle because of lack of cashflow.”
Smaller firms that are struggling with cashflow problems and are also finding it hard to access money through the Recovery Loan Scheme may find that a small business accountant from Doncaster or wherever they live can offer advice that will help them.