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What the hell is the Coronavirus Business Interruption Loan Scheme for?
It’s Autumn 1993 and three fateful journeys are beginning.
In the first, I am celebrating my 18th birthday. Newly enfranchised, I am beginning what will become a 26-and-a-half-year run of not uttering a single word of praise for a Tory politician, let alone voting for one.
It is also the first of 325 consecutive months in which I will lend money to an organisation called NatWest Bank. (There might also be some borrowing.)
At the same time, a well-mannered 13-year-old is, for the first time, skipping through the medieval cloisters of Winchester College, the all-boys’ boarding school.
This knobbly kneed future Head Boy is called Rishi Sunak and he is beginning the most exciting of our three journeys, an exhilarating rise to the role of Chancellor and Under-Treasurer of Her Majesty’s Exchequer – via a First in PPE at Oxford and a career in investment banking.
These three tales will remain almost entirely unconnected for decades – until they collide in an explosion of destiny barely a month into Sunak’s new role in Boris Johnson’s Conservative Cabinet.
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It’s March 17th, 2020, and Twitter’s population of Leftish women and gay men are lamenting their pledges to “never kiss a Tory”.
The swashbuckling young Chancellor is in the middle of an assured speech about how the Government will protect workers and business owners from the calamitous effects of the closure of our economy by Coronavirus.
In a move that Marx himself might have dismissed as “a bit Commie for my taste”, Sunak is announcing a £350 billion bailout that will see employees “furloughed” and paid from general taxation. Huge grants are to be made available, with tax and rates payments delayed.
A desk-bound Sunak, in an immaculately-pressed hoodie, is improving his offer by the hour.
No-one doubts the heroism of the Chancellor’s Odyssean response to emergency, not the slack-jawed reporters in the room, nor the new fans among his huge TV audience; not his rapt disciples back at HM Treasury, nor the admiring colleagues on his flanks who seem twice his age.
Meanwhile, I am praising a Tory politician for the first time in 26-and-a-half years because he has forced my bank suddenly into my service.
What has caught my eye is a rescue scheme for businesses, the Coronavirus Business Interruption Loan Scheme.
And as the days pass, we are fed pictures of a desk-bound Sunak in an immaculately-pressed hoodie, improving his offer by the hour.
We are promised a 12-month repayment holiday and a 12-month interest freeze. It will be administered by 40 of the most popular lenders, including my own, NatWest. Businesses can access up to £5 million in term loans, overdrafts, invoice finance or asset finance.
No personal guarantee of any form will be required for facilities below £250,000. And the Government will provide lenders with an 80% guarantee on loans, giving banks the confidence to lend.
Three days after Sunak’s momentous speech, Coronavirus has sunk its teeth deep into the jugular of my business, Foco. I have lost 75% of my regular monthly revenue and furloughed staff. My new business pipeline is decimated and agreed projects cancelled.
The Coronavirus Business Interruption Loan Scheme looks good – really good. It offers a safety net, ensuring I could re-employ staff as the furlough scheme ends and recruit new staff in the recovery. It would help me ramp up marketing, develop new business pitches and pay rent and other bills. Yes, the scheme looks good.
But it is too good to be true.
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It’s April 7th, 2020. An all-too-familiar cocktail of stress, anger and blistering frustration broils in my gut as NatWest forces its four dreary bars of muzak into my ears for what must be the 320th time during my 117 minutes on hold.
Eventually, a woman asks me what’s up. I explain, yet again, that I have been unable to apply for a “CBIL” online. The system insists I am not a key signatory to my own business account, even though I am the only signatory.
I tell the woman that another woman – my “designated case manager” – assured me falsely four days earlier that the problem had been fixed and has not answered a single email since then.
I don’t bother to complain that a man falsely promised me a call-back “within four days” when I first encountered this hurdle on March 23rd.
I don’t remind her that another man made the same false promise a week later.
I don’t tell her about the six or more hours I’ve spent listening to that muzak.
I don’t admit that I died inside a few days ago.
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It’s April 9th, 2020. I’m reading City AM. “Exclusive: Just 2,000 UK firms given coronavirus business loans,” comes the headline. It continues: “Just 2,022 loans have been made to the UK’s small and medium-sized firms through the government’s coronavirus business lending scheme. There have been around 300,000 applications so far. That means a paltry 0.65 per cent of enquiries have resulted in coronavirus business loans.”
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It’s today and I have no idea how my story ends, whether or how a Coronavirus Business Interruption Loan will become available to me or the six million other small businesses in the UK.
In happier times, these firms paid £41bn in salaries. Owners often risked life savings or remortgaged their own houses to start their adventure. They paid taxes on profits and on dividends throughout their business lives.
We don’t want hand-outs; we simply want access to lending so we can re-employ our staff and fulfil our destinies as vertebrae in the backbone of the recovery when it comes.
And where does Sunak’s story end? This well-meaning Millennial minister, who married into a billionaire family, is touted as a future Prime Minister.
But is Mr Nice-Guy destined for little more than a series of Strictly Come Dancing, having proven to be a purveyor of an empty, posturing speech?
No words….honestly the whole story makes me so angry. Sharing wildly. Much love xx
Also in one-director limited companies the sole director is not currently allowed to furlough themselves as someone has to be in charge even if nothing is hapenning. So it’s universal credit or nothing.
Wow – superb read – needs to be published nationally – but where?
Maybe The Daily Star?
I had tears rolling down my cheeks. Partly because it was so well written and partly because our small business is with NatWest who subjected us to the same tortuous journey. Who would know that to apply for a CBIL you should NOT be logged in to your online Nat West account otherwise it thinks it will be a standard loan application. Who would know that in the application you MUST only select it is for Assets otherwise it won’t grant you the loan under the CBIL. All top tips after speaking with our helpful Relationship Manager. And the story ends with being declined! Yes we have banked with Nat West for four years. Serviced our existing start up loan with them impeccably. Grown the business year on year. Never needed an overdraft and so on. They know us. They know how we manage our cashflow but would prefer now that we cease trading and put 8 people out of work. If I am right the taxpayer bailed them out if their calamity to the tune of 45bn yet today their market capitalisation is only £18.5bn. The taxpayers money has gone and will probably never be recouped. NatWest are willing to leave a litter of closed good businesses and potentially tens of thousands out of work because of their inability to apply common sense to these loan applications.
This approach by Nat West and all major banks will likely change shortly (by the end of April).
The government is keeping a close eye on the ratio of loans applied for: loans granted. There has been a shift recently however (not sure when you were turned down) but the latest news is that new the instructions supersede version A of the roll-out where banks were told that CBILS loans could only be offered to viable businesses that could not access finance on normal commercial terms. Now “all viable businesses affected by Covid-19” will be eligible.
The distinction is critical. Previously small business owners complained that banks were trying to steer them into standard interest-bearing loans, rather than the juicy government-backed CBILS product that is interest free for 12 months and has no set-up fees. For their part, the banks argued they were merely implementing the government’s rules. They can’t argue that now so I would re-apply.
Answe to Paul’s comment: Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, i.e. they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.
This also applies to salaried individuals who are directors of their own personal service company (PSC).
Best of British in getting this resolved!
But…is Twitter really only populated by lefty women (straight or lesbian?) and gay men? Or were you just referring to these sub-sections of the Twitter community that could include right-leaning women and true grit John Wayne men?