The challenges for small businesses continue. There is little if anything you can do about the pandemic and we often feel that we have no control over the actions of government and banks. But collectively we can make our voices as entrepreneurial business owners heard and never before has that been as important as it is right now.

This week in an editorial the Financial Times said:

Despite the good intentions of governments in the US and the UK, many midsized   businesses are struggling to access the emergency loan schemes that have been made   available. Owners report delays in receiving loan approval. Others say they have been   turned down by their banks as they have no borrowing history with them. 

Not enough of the rule book has been torn up. Governments have chosen to use commercial banks as the conduits for the rescue funds. This has thrown up the usual caveats associated with commercial lending, such as high interest rates and demands for personal guarantees. These have frustrated progress early on. These schemes are laudable but worth little if companies do not have the tools to access life-saving funds. 

Policymakers need to cut through the bureaucracy and go further in their guarantees. Grants, rather than loans, should be considered. Getting the right support to businesses of all sizes is critical if they are to have any hope of surviving the next few months. Even if the bill for governments looks high, it will be nothing compared with the economic cost of unprecedented mass unemployment and depression that would be inevitable if businesses are not protected in the short term. 

They are right – although why it has taken over a month for them to reach this conclusion when the weaknesses in the government's loan guarantee scheme were apparent the moment that it was announced is a cause for concern. The media has unprecedented access to government and should be far more critical.

No-one can now doubt that CBILS isn’t fit for purpose and must be radically improved; the German and Swiss models would be a good starting point. It is never too late.

One in ten UK businesses have already failed and one in four have stopped trading. Only £1.1bn (out of a promised £330bn) has been made available to just over 6,000 businesses in the four weeks since the scheme was announced. That is shameful and bankers as well as government as just as much to blame.

But you can do something and we all must; email your MP and explain that other countries are supporting their small business sector. Make them aware that without proper intervention the government will be condemning British business to a generation of being uncompetitive in global markets at a social cost of unprecedented proportions that will far outweigh anything in our lifetime.

We can still put this right.

 

Noel Guilford

PS I was sad to see that Norman Hunter, one of the great footballers of my generation, has passed away. I met him several years ago when he, and some other legends, were hosts on a football themed cruise. I was surprised to learn that as a defender known as 'bite yer legs' he was in fact the first player to win the Player of the Year award a fact of which he was just as proud as his nickname. RIP Norman.