Hundreds of firms yet to receive money through furlough scheme
Hundreds of UK firms who have furloughed staff during the coronavirus pandemic are yet to receive money through the government’s scheme.
The job retention scheme has been a cornerstone of the Chancellor’s coronavirus support package. It sees the government pay up to 80 per cent of wages, of up to £2,500 a month, to workers on furlough during the pandemic.
Smaller businesses are missing out on furlough support
A survey of more than 900 firms commissioned by comparison website KnowYourMoney.co.uk, found that nearly half of UK firms have furloughed staff, with a quarter making employees redundant.
The Treasury has promised that every successful business to apply will receive payment within six days after they lodge their claim. But 71 per cent of UK firms have not received support through the scheme, even though it is due to wind down next month.
The UK’s smallest businesses have been the worst hit, with 86 per cent of micro businesses not yet receiving furlough money. Additionally, 65 per cent of small businesses, and 46 per cent of medium businesses – between 50 and 249 employees – have not yet received support.
Larger firms benefit from CBILs scheme
On the whole, respondents were happier with the government’s loan schemes, notably the CBILs scheme which provides financial support to SMEs hit by the coronavirus outbreak.
Banks have faced criticism for being slow to process applications and the survey shows there is some divergence in how it has been received by different sized businesses.
Of the 360 large companies surveyed – firms with over 250 employees – 85 per cent have been successful in an application and have since received a loan. This falls to just 56 per cent in small businesses, and 34 per cent of medium-sized businesses.
Rishi Sunak introduced the bounce back loan scheme after small firms complained they were being shut out of CBILs. The new scheme, launched last month, offers the UK’s smallest firms loans worth 25 per cent of turnover, up to £50,000. They are 100 per cent guaranteed by the government.
Nic Redfern, finance director at KnowYourMoney, said: “Evidently, with closures and furloughing taking place on a huge scale, there is significant need for financial support within the private sector.”
“That is why it is not only essential that loans are made available to businesses of all shapes and sizes, but also the process of applying for those loans is made as simple as possible.”
“What’s more, our research illustrates that the funds must then be released quicker – thousands of companies are waiting for money they have successfully applied for and this delay could run them into the ground.”
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