ONE in ten small firms are planning to close as it emerged European countries are vastly outstripping Britain on emergency coronavirus loans.
Just 6,020 have been issued by banks so far under the Government scheme — up only 2,000 in a week, it was revealed today.
UK Finance also admitted only 28,460 firms have been allowed to formally apply despite 300,000 inquiries.
In four weeks of the scheme so far, just £1.1billion has been paid out to desperate companies struggling to stay afloat.
Research by HOAR reveals some European states are issuing as many as 25 times the number of loans as the UK.
The shock analysis found:
- FRANCE has already backed 150,000 firms with £19.2billion, and a further £35billion in the pipeline. President Emmanuel Macron says his government will ultimately guarantee up to £260billion of business loans;
- In SPAIN, banks have issued £4.1billion of state-backed loans to 48,542 companies;
- In SWITZERLAND, with a population just 12 per cent the size of the UK’s, £13.2billion has gone to 98,573 firms, with some getting the money into their bank accounts within just 24 hours;
- GERMANY’S economy ministry has overseen 9,368 loans to businesses totalling £4billion. Under the country’s rescue programme, all requests for £2.6million or less are approved instantly, while those up to £8.7million are fast-tracked in two or three days.
New polling seen by HOAR reveals ten per cent of all small businesses are now making plans to close, sell or hand on their firm in response to the lockdown.
One in seven has already laid off workers and a third plan to do so, according to a Federation of Small Businesses survey.
The Government last night admitted the number of emergency loans was not acceptable.
City Minister John Glen conceded: “It’s absolutely critical that pace picks up.”
Federation of Small Businesses national chairman Mike Cherry said: “Many members tell us it’s difficult to get to the formal application stage — banks are still slow to respond.”
It emerged one in five jobs in large towns and cities are at risk amid the meltdown.
A Centre for Cities think tank report reveals Crawley, in West Sussex, will suffer the worst — with more than half of jobs in danger because of its dependence on nearby Gatwick airport.
The Treasury last night extended the cut-off date for the coronavirus wage scheme so 200,000 extra workers can get 80 per cent of their pay too.
Staff originally had to be employed on February 28 to qualify but employers can now furlough employees for the handouts if they were on the payroll on or before March 19.
‘I may have to self-fund May’s £60k payroll’
Landlord Sean Hughes, 38
SEAN Hughes runs three pubs in St Albans, Herts — two qualify for financial aid but The Boot is too big for help.
Sean, 38, says: “I don’t understand why the Government thinks a pub with a high rateable value wouldn’t need help. We need help with this one more than the others.
“We have 68 staff and have had to furlough every one.
“The best thing the Government has done is provide money to furlough staff. Without that we’d have gone under.
“But we still have to fund the May payroll, which means finding £60,000 in cash which we will then claim back.
“We’re told we should have that money by the end of April. If not, we’ll have to find the £60,000 ourselves, which will be very, very hard.”
‘My staff on furlough now outearn me’
Estate agent Julian Corbidge, 52
JULIAN Corbidge has furloughed his two staff — who now earn more than he does.
All house sales have been suspended and he discovered that, because his company is limited, he qualified for nothing from the Government.
The father of two, who was running Linda Leary estate agents in Durham, found himself overnight with no income.
Every day he calls Barclays in the hope of getting a loan which, if he gets, he will be paying back over five years at a rate of nine per cent.
Julian says: “I have been spending my days on hold in the hope of a loan at a high rate of interest which is going to be a burden to a significantly weakened business.
“I don’t have lots of savings to fall back on.”
‘Who has a good credit rating at the moment?’
Hairdresser Dennie Smith, 52
WHEN coronavirus hit Dennie Smith closed the Vintage 62 hair salon she runs in Selsdon, South London, and furloughed her nine staff.
Dennie, 52, applied for a coronavirus business loan, where the Government underwrites 80 per cent of the risk.
She said: “I’ve been with HSBC for 14 years and needed £15,000 to see me through a couple of months but the bank said the minimum is £25,000 — so they are forcing you to take more money.
“I’ve waited three weeks, going on the phone, filling in forms and sending figures off — but yesterday they told me I had been declined because of my credit rating.
“Who does have a good credit rating at the minute? Everybody is in the same boat.”
‘We bailed out banks, yet they won’t help us’
Bus boss Tarrant Anderson, 42
SUPERGROUPS Primal Scream and Elbow usually go to Tarrant Anderson when they need a tour bus.
But the cancellation of all music events has meant his fleet of 11 sleeper buses and 41 vans are now idle.
Tarrant, from Oxford, said: “We all bailed the banks out in 2008 but now the boot is on the other foot they appear to be doing little to give back.
“Our revenue dropped to zero but over three weeks on we haven’t been able to secure either a grant or a CBILS loan.
“Meanwhile, we are being chased by suppliers who are threatening court action.
“Parking our tour buses outside hospitals to be used by NHS doctors and nurses has been the one ray of light throughout this nightmare.”