LONDON, April 8 (Reuters) – Only a small fraction of British companies have successfully accessed financial help from the government to withstand the economic fallout from the coronavirus outbreak, while scores more have failed so far, a survey showed on Wednesday.
The British Chambers of Commerce (BCC) said 1% of companies had successfully applied for the government’s Coronavirus Business Interruption Loan Scheme, while 8% said they had been unsuccessful.
Another 7% said they had made use of government grants for small businesses, but double that proportion said they had been unsuccessful.
Although some of the survey was conducted before April 2, when the government announced it would relax rules to allow more businesses to apply for help, the figures make unpromising reading for the future of British companies.
Gauges of business activity have already slumped to record low levels and analysts expect Britain’s economy will contract by around 10% or more in the second quarter.
The companies that had so far failed to access government finance cited complexity and slow response times.
The BCC said 16% of companies had less than a month’s worth of cash reserves left, while 6% had run out entirely.
“Our latest data shows that many businesses face a cliff-edge scenario, either at the end of this month or over the course of the next quarter,” BCC Director General Adam Marshall said.
Britain has pledged over 60 billion pounds ($73 billion) in public spending and tax cuts in an attempt to shield its economy from a deep recession caused by the coronavirus outbreak, and the final bill could end up being a lot higher.
Finance minister Rishi Sunak has rushed out a string of emergency measures to support workers’ incomes, offer companies tax breaks and make the welfare system more generous.
Last week, the government said its small companies support programme had 90 million pounds of lending approved for nearly 1,000 firms.
The Federation of Small Businesses (FSB) has complained of a “nightmarish” experience for business owners that have already tried to seek help from lenders.
The proportion of companies planning to furlough between 75% and 100% of their staff rose to 37%, up from 32% last week, the BCC said.
“Every minute counts, and governments, local authorities and banks must do everything in their power to ensure support gets to firms on the front line more quickly,” Marshall said.
The BCC survey of 1,017 companies was conducted between April 1 and April 3. (Reporting by Andy Bruce; editing by Stephen Addison)
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