Construction Leadership Council calls to streamline loans
The Construction Leadership Council is calling for the Government to back streamlining coronavirus loan schemes. After research finds that only 12% of construction firms have had loans approved.
The research by the Construction Leadership Council (CLC) Covid-19 Taskforce finds that just 12 per cent of surveyed firms’ applications for Government loans are being approved. 30 per cent have been declined, while 58 per cent are still waiting for a decision. Firms are facing pressure on finances from both the current suspension of many projects, and the need to invest to restart works.
SMEs are particularly hard-hit. They often do not have the resource to wade through the current application process. The CLC task force is calling for simple guidance to be available, helping businesses to get a decision.
Some small businesses will benefit from the recently announced Bounce Back Loan scheme. However, many construction firms will be looking for support above its £50,000 threshold.
The CLC has said that if applications remain slow the Government should step in. This will help guarantee 100 per cent of loans under the Coronavirus Business Interruption Loan Scheme. This would relieve pressure on banks to run a fine-tooth comb over every application. It will also help to release funds that could save SMEs across the sector.
Bumping applications to the top of the queue
The taskforce also recommends that banks should bump applications from companies supporting essential works. As a result, sites such as hospital and utilities construction will be able to go to the front of the queue. Those businesses will then be able to show that they are facing immediate hardship.
Construction Leadership Council joint chair Andy Mitchell said: “The Government has done an astonishing job putting in place ground-breaking financial support to UK businesses in very short order. The Coronavirus Business Interruption Loan, Coronavirus Large Business Interruption Loan Scheme and Covid-19 CorporateFinancing Facility are a shot in the arm for our sector and UK plc.”
“We want to help make sure this vital support makes its way into the industry, providing short-term liquidity as companies get back to work after the Covid-19 crisis. We hope to work with the Government and lenders to make sure this happens”
Hannah Vickers, chief executive at the Association for Consultancy and Engineering said: “We looked at Germany which has a single streamlined process only doing its own checks on loans above €3 million and on a fast-tracked self-certificated basis for loans below €10 million. By moving towards a similar model in the UK we can save many vulnerable businesses in our sector”
The Taskforce will continue to monitor the financial health of the sector, assessing access to capital to start/restart projects and sector specific risks including trade credit insurance.
The research to underpin this CLC statement was collated by a taskforce consisting of BEIS representatives, Mace, trade associations including Association for Consultancy and Engineering, British Merchants Federations, Electrical Contractors Association and professional bodies the Institution of Civil Engineers and Royal Institute of Chartered Surveyors.
CLICK HERE for a copy of the research
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