Almost three weeks after Chancellor Rishi Sunak first launched the program to help small and medium-sized businesses with loans and other funding of up to £ 5 million each, he turned It turned out that only 4,200 of the estimated 300,000 businesses that sought help online received rescue loans.
Tens of thousands of companies have reportedly filed formal applications, but amid accusations of excessive bureaucracy and reluctance on the part of lenders to make loans, only a fraction have received the green light.
Alok Sharma, the business secretary, revealed the lack of progress as pressure was mounting on officials and major banks to speed up the processing of loan applications before thousands of businesses fell.
Sunak responded to criticism of slow progress by hiring former Bank of England adviser Richard Sharp as a consultant to expedite the processing of rescue loans.
Sharp, a former Goldman Sachs banker who was Sunak’s boss at the time of the investment banker’s chancellor, was a member of the Bank’s financial policy committee working with the new governor, Andrew Bailey.
Sunak plans to announce the appointment of Sharp this week. He also plans to finalize plans to extend the business loan program with sales in excess of £ 500 million, including doubling interest-free amounts available to businesses to £ 50 million.
Sharma told Sophy Ridge on Sunday, “The last figure I have is around 4,200 and just over £ 800 million has been spent.
“I have spent the past two days speaking directly to some of the larger lenders in this program and have been very clear in telling them that we need to withdraw money as quickly as possible. They understand that… we have set this up at a rate and everyone is literally working 24 hours a day. ”
When asked that the current figures correspond to a success rate of barely 1.4%, he did not dispute this figure. When asked if he was worried, the secretary for business replied, “Well, sure. It’s not just about worrying – I fully understand business concerns. “
On Wednesday, British chambers of commerce said that only 1% of companies responding to its survey had successfully obtained a loan under this program, while 7% had received one of the grants offered to small businesses by the Treasure.
On April 3, Sunak relaxed the criteria for granting CBILS loans and prohibited banks from asking for personal guarantees from small businesses seeking help.
The Observer reported on Sunday that Ed Miliband urged Sharma to review the program after low adoption by small and medium-sized businesses.
The fictional secretary of business said that thousands of businesses were on the verge of collapse and that without greater government involvement, they risked going bankrupt. “The risks of doing too little, too slowly to help businesses are much greater for the long-term health of the economy than the risks of doing too much, too fast,” he said.
The lack of available bank staff reportedly delayed initial requests, despite the fact that bank workers are considered key workers.