By Kristy Dorsey
Greater consistency and detail on various government Covid-19 support programmes is now required as nearly three-quarters of directors report that the pandemic poses a high to severe threat to their business.
In a survey of more than 700 business leaders carried out after the UK Government announced its job retention scheme, the Institute of Directors (IoD) found that 40% of respondents had already contacted their bank about accessing an emergency loan. Slightly more – 42% – had been in touch with HMRC about deferring tax payments.
Malcolm Cannon, national director of the IoD Scotland, said more is needed to assist those “falling through the cracks” of government support.
The IoD is calling for better co-operation from the lenders who are administering the business interruption loan scheme on behalf of the Government. In particular, it said that all lenders should drop requirements for personal guarantees to access emergency funding.
A personal guarantee is where a company director personally commits to repay any debts if the business is unable to meet its financial obligations. This effectively puts their home and other personal assets at risk.
“The challenge here is the lack of consistency between the banks, because there is no doubt that some of the banks are following the spirit of what the Treasury has announced – to provide assistance without barriers – while others are not,” Mr Cannon said.
The IoD also wants to see measures put in place to support the owner-directors of the UK’s smallest companies, who often take their income as dividends and have been excluded from the Government’s furlough programme. This should be extended on the same terms as those for employees and the self-employed, who will get 80% of their monthly income.
In addition, grants for firms that pay little or no business rates on their premises should also be made available to the smallest of companies and start-ups that do not have business premises, including those in co-working spaces.
“Our members are exploring every avenue to survive, but there are still steps than can and should be explored by our national and devolved governments to relieve some of this incredible pressure,” Mr Cannon added.
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