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CORONAVIRUS LATEST: McLaughlin presses for action to help business survive the pandemic

'Many local businesses experiencing difficulties accessing British government's emergency financial schemes'

CORONAVIRUS LATEST: McLaughlin presses for action to help business survive the pandemic

SDLP Economy Spokesperson, Sinead McLaughlin MLA has warned that Northern Ireland businesses are reporting having difficulty accessing UK government financial assistance, intended to enable them to withstand the Covid-19 crisis.

The Foyle MLA said: "Many Northern Ireland businesses are struggling to survive the coronavirus pandemic. The British government put in place emergency measures, which should assist them. These measures are welcome, however many businesses are coming to me and saying that they are having serious difficulty in accessing these schemes in the way they are supposed to operate.” 

"I have written to Economy Minister, Diane Dodds MLA asking her to press the UK government to urgently stress to banks across the UK that they must do more to enable local businesses to access the funds they need. Many businesses will struggle to survive this pandemic if we do not act quickly. We are dealing with a health emergency, but it is fast becoming an economic emergency.”  

In the letter, the Foyle MLA says she received representations from several businesses in recent days, who have expressed concern at the responses from banks in Northern Ireland regarding the operation of UK government support schemes.
  
Those concerns include banks telling businesses they can only access the Coronavirus Business Interruption Loan Scheme if they fail to meet criteria for a loan from that bank under normal lending terms, which may be significantly more expensive and which the business may not wish to engage in.

A number of banks have told businesses they are not engaging in the Coronavirus Business Interruption Loan Scheme, or are only doing so for sums much less than the £5m maximum specified by the government.

Many businesses are too large to access the Coronavirus Business Interruption Loan Scheme, but not large enough to access the Bank of England scheme for larger companies.

Some banks are only considering applications under the Coronavirus Business Interruption Loan Scheme from existing customers. 

In addition, businesses - and homeowners with mortgages - who are being given holidays on loan repayments, but no extension on the length of term of the repayment, are finding they are faced by higher monthly repayments at the end of the crisis, when they are still likely to be struggling financially. 
  
"We believe that these are systemic problems with the government’s measures of support, which need to be addressed by the UK government with participating banks and building societies. It is our understanding that these problems are not unique to Northern Ireland and are the same for businesses operating in Great Britain," the SDLP representative added.
 
Indeed, Lord Leigh of Hurley has made similar points in relation to the attitude of banks in Great Britain. He has issued a statement saying: “I am hearing that the banks are being very uncooperative. They have been seeking personal guarantees, although some have now relented.

"I have heard of one bank who told a customer that although their turnover was below £45m they had more than 250 employees and were therefore ineligible. Likewise start ups and new tech companies will never get it as they have no profit history, indeed some no revenue yet! Clearly the banks are not keen on these loans. They would rather encourage customers to take a regular product, on which of course they can charge fees as opposed to the CBLS.” 

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