What a joke: 'I tried to get a Coronavirus Business Interruption Loan'

By April 14, only 6,020 of the Government’s Coronavirus Business Interruption Loans had been granted out of more than 300,000 applications.

“The system is not coping,” said Ian Carrotte of ICSM Credit. “As an exercise I applied for one with Nat West and plucked the figure of £20,000 out of the air as I don’t need one. I went online and completed the details for the interest free 12 month loan with a £150 completion fee at the end. All fine so far but that was two weeks ago. I’ve chased it up and so far there’s no communication, no paperwork sent and nothing to sign. It’s a joke. Businesses need cash fast as many are teetering on the brink of collapse.”

His experience is reflected across all industries and across all parts of the country as CEOs and finance directors bang their heads against a brick wall in frustration at the delays. David Price writing in Construction News said he has spoken at length to firms from across the industry’s supply chain. He reported: “The average contractor has enough cash to last around six to eight weeks while projects are stopped. Beyond that, the viability of businesses is seriously in doubt. Help in the form of £330bn-worth of government-backed financing promised by chancellor Rishi Sunak in the middle of March is not flowing fast enough. Contractors big and small are being thwarted by a mix of banks’ inability to process the tsunami of applications and lenders unwilling to lend. The industry has just weeks to somehow get the cash flowing again. But how that happens in an economy paralysed by the coronavirus pandemic is worryingly unclear.”

One million in trouble

Everywhere you look it is the same story. Andy Verity of the BBC reported last week: “Nearly a fifth of all small and medium-sized businesses in the UK are unlikely to get the cash they need to survive the next four weeks, in spite of unprecedented government support. That's according to research from a network of accountants which suggests between 800,000 and a million firms nationwide may soon have to close. Many firms have told the BBC that banks have refused them emergency loans.”

Meanwhile Ian Carrotte is still waiting for an answer and details of the loan he applied for despite not needing it. He said: “Members of ICSM Credit have told us that it’s one thing to apply and another one to actually get the cash in your account to pay overheads and wages. I accept these are unusual times but when the chancellor set up the loans and grants scheme as a former banker he would have known the system would not cope. Businesses must chase up money owed to them as that is their best form of cash flow.”

That idea has been taken up by scores of ICSM Credit members who have either used the credit group’s free legal letters or their debt collection service headed by Paul Carrotte. He said that contrary to popular opinion firms are paying invoices once the right sort of pressure is applied.

“We’ve had a lot of success for clients during the coronavirus crisis so far,” he said, “debtors are generally willing to pay smaller invoices less than £10,000 as despite everything they do have some cash available. Nobody I’ve spoken to has been able to access one of the government bank loans so getting paid for work you’ve done is the best way to keep afloat.”

Courts are open

Banks and insurance companies he said have been telling customers that the courts and legal systems are closed which is untrue.

“Generally business is continuing albeit at a reduced level,” he continued, “with most firms willing to pay invoices but when it comes to large debts I say to clients you need to be open to payment plans. Debtors will nearly always agree to these but it comes down to negotiation. Payment plans can have reviews built into them every so many weeks so that if things pick up the payments can increase and it is always better to have some cash coming in as well as keeping a business relationship intact.”

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk