With April payroll approaching, London Chamber of Commerce & Industry (LCC) is warning that unless banks up the pace of lending, then some of the capital’s SMEs will soon be out of business.
The capital’s oldest business group also warned that the Government needs to provide rapid clarity regarding furlough funding beyond May 31, in order to avoid unnecessary redundancy notices being issued throughout the economy.
In an update to members LCCI CEO Richard Burge included that banks need to:
- Up the pace of CBILS lending and allocate all available resources to it.
- Publish clearly the interest rates they will charge on CBIL loans beyond the first year.
- Declare the threshold for security on those loans.
- Guarantee all existing customers zero-interest and zero-fee overdrafts for six months based on the average monthly cost base of their business.
- Say when they will be able to accept CBIL business from non-existing customers.
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Mr Burge said: “The temporary scheme is in place for three months (starting from 1 March) – meaning there’s no certainty onwards from 31 May.
“Redundancy notice for 100+ people requires 45 days consultation, and below is 30 days’ notice. Clearly this is a fast-paced crisis and rightly the Government are listening to expert advice that will impact how long the shutdown of the economy is appropriate for in order to save lives.
“But unless the Government provide rapid clarity about the length of the furlough programme then I fear many businesses will feel they have to turn to redundancy consultation sooner rather than later.”
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