By Scott Wright

THE Coronavirus Business Interruption Loan Scheme (CBILS) is being shunned by the majority of UK firms as worries over cash reserves continue to weigh, a key barometer of sentiment during the pandemic has found.

Fifty-seven per cent of firms say they do not intend to apply for the scheme or other finance, according to the latest weekly business impact tracker from British Chambers of Commerce. Of that figure, 30% said they have not applied because they could not repay the loans.

The latest BBC tracker is published today after 700 responses were received from polling carried out between April 22 and 24, before Chancellor Rishi Sunak announced a new micro-loans scheme and changes to the CBILS to speed up the applications process on Monday. The survey found that, of the 20% of firms that tried to access the CBILS, a majority have been unsuccessful or are still waiting on a decision; 13% said they have been unsuccessful.

More than half (51%) of firms said they have three months’ cash in reserve or less, while 5% said they have none in reserve, in line with previous weeks.

Meanwhile, the number of firms that have put a portion of their staff on furlough rose to 76%, up from 71% last week and 66% the week before. The BCC found nearly no redundancies, signalling the effectiveness of the Job Retention Scheme.

BCC director general Adam Marshall said: “Our data shows loan support has not been getting to businesses fast enough, so this week’s announcement of the Bounce Back loan scheme and further improvements to the CBILS scheme are welcome steps toward getting cash to businesses on the front line.

“Application processes need to be easier, and decisions made more quickly, especially for those firms that have struggled to access CBILS loans.

“There can be no let-up in the pace of work to get cash to stricken businesses, and ministers must keep an open mind on making even more changes to the support available. It may become necessary for the government to consider grants, rather than loans, for some of our hardest-hit firms, who are concerned about taking on debt amid unprecedented economic challenges.”

A HM Treasury spokespersom said: "More than 40,000 applications have already been received for these loans and roughly half have already been approved. Lenders are working quickly on the remainder and approval rates are high.

“Our new Bounce Back Loan Scheme will ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days. It comes alongside the £6 billion awarded in business grants, supporting four million jobs through the job retention scheme, scrapping business rates and generous tax deferrals supporting hundreds of thousands of firms.”