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It has been revealed that the £2.8bn worth of funding set aside for the Coronavirus Business Interruption Loan Scheme (CBILS) accounts for only 2% of the £218.8bn currently due to SMEs in unpaid invoices.
In figures released by fintech invoice platform bePayd, said the sheer sums of money constantly flowing through SMEs show just how important it is to ensure the cash that is available gets through to thousands of small businesses.
Chancellor Rishi Sunak has offered funding of up to £330 billion through several loan schemes including the CBILS plan, guaranteeing 100 percent of loans to businesses suffering from the lockdown and disruption.
He has been under pressure to cover 100 per cent of the loans, to speed up the application process and free up cash, although he has so far resisted.
Anthony Persse, a director at bePayd’s owner Proactis, said: “While the UK Government recognises the importance of keeping companies afloat during this crisis, we must put into perspective how much more money needs to flow through the economy to avoid the collapse of huge swathes of businesses and livelihoods.
“With an estimated £212 billion currently due to SMEs, the CBILS loan scheme is falling well short of addressing the cash flow problems that lie ahead.
“We must ensure that larger businesses have adequate means to process cash payments quickly, handing it on to their suppliers and contractors.
“The silent majority of small businesses are in their millions, are not accessing the CBILS scheme, and are desperate to know payments can be made quickly.”
The Government has introduced some grants for small businesses, but many are reliant on fulfilling orders and contracts for larger companies.
Martin McTague, policy and advocacy chairman of the Federation of Small Businesses, said:
“The UK already faced a late payment crisis before the coronavirus hit, and we know that late payments are likely to get worse in an economic downtown. Now more than ever, small businesses deserve to be paid faster.”
The UK Small Business Commissioner, Philip King, is understood to be interested in using fintech, including bePayd, to help SMEs process faster payments to SMEs.
Responding to this news, CEO of NextFin, Sacha Bright has said: “Let’s hope that larger organisations that receive financial support from the government do the right thing and pay their small business contractors.”
Author: Sacha Bright & Oliver Murphy
Disclaimer
To the best of our knowledge, the information we have provided is correct at the time of publishing. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed.
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