Bath MP Wera Hobhouse has called on the Government to give assurances to banks so that they are able to speed up the loan application process for businesses.
Wera Hobhouse wrote to Rishi Sunak, the Chancellor, on Wednesday 15 April asking the Government to give banks clear instructions on the minimum level of underwriting required for loans to fund the Business Interruption Loan Scheme.
Wera Hobhouse asked the Chancellor to speed up the loan process, which can take up to 7 weeks for high street banks to process.
With bills due at the end of April, cash flow is a major issue for small businesses. This delay in loans is, therefore “the perfect storm” and means that some companies are going under despite the Government’s promises.
According to numbers released on Tuesday 14 April, only 2% of companies have been able to claim loans through the Job Retention Scheme (2).
Wera Hobhouse acted after speaking with local businesses and banks.
MP for Bath Wera Hobhouse said:
“Businesses need money urgently to pay their staff and overdue invoices. Banks cannot give them this money without going through the usual, rigorous process because the Government has failed to guarantee that loans not underwritten in the normal way will be paid back. The Chancellor must provide urgent clarity on this and set a minimum standard of underwriting required for these loans.
If the Government does not act then they will be sabotaging their own scheme – and failing hundreds of businesses in Bath and thousands more across the country, with devastating consequences.”