TOO many business are falling through the gaps when it comes to support packages offered by Westminster and Holyrood, industry campaigners have warned.
The Federation of Small Businesses (FSB) has written to the Scottish Government urging them to set up an emergency grant and loan scheme for those who are either ineligible for the current schemes or believe what is on offer is not enough to save them.
It comes as the Centre for Economics and Business Research confirmed yesterday that the coronavirus lockdown is costing the British economy £2.4 billion a day
In a letter to ministers the FSB states that entrepreneurs, for example those who run businesses from home or tradespeople working from vans, are currently excluded from the coronavirus grant scheme in Scotland, and those who are newly self-employed are not able to apply for the UK government’s help.
The letter, sent by the Scotland policy chair Andrew McRae, states: “There are gaps in financial support for a variety of different businesses.
“Small businesses which are not linked to the rates system, such as home or vehicle-based businesses in Scotland, cannot access the grant funding package.
“Similarly, the UK Government’s Self-Employed Income Support Scheme leaves a number of people who work for themselves without support. Further, it is fair to say that the Coronavirus Business Interruption Loan Scheme, notwithstanding the welcome reforms announced this week, has not yet delivered the intended volumes of short-term bridging finance that were envisaged. As a consequence, we still have substantial concerns that a significant minority of operators will either get very little or no support from government at any level.”
A suggestion has been made to start an emergency scheme, similar to the Welsh Government’s £500m Economic Resilience Fund, and pay for it through underspends in current grant programmes or by asking the Treasury for extra cash.
Mr McRae said that it was right for governments to set up support schemes for “the greatest number” of firms, but said: “Policymakers know that many businesses are on borrowed time.
“As the dust settles, it is clear that there are some in business not getting any help at all and there are others for whom the help looks insufficient. That’s why we’re arguing for a new grant and loan support fund, which would allocate funding on a case-by-case basis.”
He said that while not everyone who cannot access funding will need it, “for those that do, we’re urging the Scottish Government to fill that gap.”
“While many in business are immensely relieved at the help in the pipeline, it isn’t fair that some feel forgotten. Ministers in Edinburgh have an opportunity to provide a new safety net.” he explained.
Caroline Wylie, a self-employed business owner based in Glasgow, said she is one of those struggling financially as a result of the funding support gap.
The entrepreneur runs a virtual PA firm from home, and also leads the association of virtual PAs in Scotland, which has more than 3000 members.
She said: “There just isn’t any cash flow for us until the self employed stuff kicks in, in June.
“So, as a self employed person what we’re facing is having to cashflow businesses, not just for our personal expenses - the money that we would normally have taken out of the business to pay our mortgage or electricity, food, bills, etc - but we’re also having to keep the businesses running too. That includes things like the website, insurance...things that you have to pay out regardless of whether or not you’re actually earning any money.As much as you can talk to people try and minimize the costs, there are some which are just not negotiable, that you can’t you can’t just cut back on.”
A Scottish Government spokesman said the government was “going to great lengths to support businesses” with a £2.2bn support package.
He added: “We have targeted small businesses and medium sized businesses in the retail, hospitality and leisure sector who are liable for non-domestic rates to maximise the number we can support.
The spokesman said as more firms were eligible for grants in Scotland, they have capped them to one per business, allowing “us to offer support to sectors including creative industries, aviation and fishing, which are not receiving support elsewhere.”
He said: “As such, parity with other nations could require us to strip those sectors of support, which could cause even greater hardship.
“We continue to explore how best to support businesses.”
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