Only a small fraction of British businesses have been able to get hold of emergency loans to keep ticking over, despite promises that money would start flowing quickly, a survey has found.
Just 1% of firms have successfully accessed the UK Government’s Coronavirus Business Interruption Loan Scheme (CIBLS), which was announced by the chancellor last month, according to new data.
The results, from a British Chamber of Commerce survey, found that 8% of the companies that responded had been unsuccessful in their applications.
Firms said that a complex application process and slow replies had held them back.
UK Businesses have been given access to the government-backed loans to help them through the coronavirus outbreak. Meanwhile smaller companies can apply for grants of up to £25,000, (€28,000) depending on their size.
According to the survey, 7% of respondents are receiving grants. But 14% had been unsuccessful in trying to get grants.
Most of these, 83%, said they had not met the criteria, 14% said that the response from authorities was too slow, or did not come at all.
The proportion of firms planning to put all their staff on the government’s furlough scheme – which guarantees 80% of their salaries – has risen to 20%, from 17% in the first survey that the BCC did.
A total of 37% of respondents said they plan to furlough between 75% and 100% of their workforce in the coming week.
“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,” said BCC director general Dr Adam Marshall.
“We’ve seen a big jump in the number of firms furloughing staff, and many are now starting to apply for access to government loan and grant schemes to keep themselves afloat. Yet our research suggests that support is only starting to reach firms on the ground.”
Six% of more than 1,000 respondents to the survey, which was performed last week said they have already run out of cash.
Meanwhile 57% of companies said they have cash to last three months or less.
Most of the respondents, 77%, are in the service sector, with 23% in the manufacturing sector. Just under half are small businesses with between one and nine employees.