TheCityUK boss: Banks not ‘shirking’ CBILS duty
One of the City’s most senior figures has insisted banks are not “shirking their responsibilities” as the government unveiled further modifications to the controversial Coronavirus Business Interruption Loan Scheme (CBILS).
Miles Celic, chief executive of industry group TheCityUK, said that banks were doing “their level best” to address demand for loans in what he called “an unprecedented situation.”
Talking to Morning Wire editor Christian May on The City View podcast today, Celic praised “the enormous amount of work put in at very short notice” to get the loan schemes off the ground. But he conceded that “there will need to be fine tuning and lessons learned as we go on.”
Referring to the 2008 financial crisis, Celic said “it was the taxpayer and the country that had to stand behind the banks [whereas] this is an opportunity for banks and the financial sector to stand behind the country”.
Celic’s comments came after chancellor Rishi Sunak announced changes to the CBILS scheme, which has drawn criticism for the low volume of loans issued and the complexity of the application process.
The UK’s smallest businesses will have guaranteed access to loans of up to £50,000 within 24 hours of applying, starting next Monday, Sunak revealed yesterday.
Sunak said banks will not need to perform any “forward looking tests of businesses viability” for such loans. His aim is to speed up how quickly the smallest firms get access to cash.
“I know some small businesses are still struggling to access credit – they are in many ways the most exposed to the effects of the coronavirus,” Sunak said.
“They will need extra support to get through this crisis. Some businesses will not want to take on more debt… but for some others loans will be a part of the answer.”
Dame Carolyn Fairbairn, CBI director-general, welcomed the change on CBILS.
“It’s good to see the chancellor listening to business, proving that where there’s a need to adjust schemes, he will do what it takes,” she said.
“It will be vital to maintain this approach in the months to come. Every job saved today will ensure a faster recovery tomorrow.”
Meanwhile, the seven largest lenders to small and medium sized businesses also welcomed the committed to a simplified application process in which they will no longer require forward projects or a future business plan when assessing a firm’s viability.
HSBC, Natwest, Lloyds and others all committed to easing the documents small businesses must provide in a CBILS application.