The government has taken big steps to support the business community in these extraordinary times. However there is much more to be done and we must continue to lobby government and our MPs. The news yesterday that up 800,000 small and medium sized businesses could be on the brink of collapse in the next few weeks has sent shock waves through the economy.

I have had the chance to look further at the Coronavirus Business Interruption Loan Scheme which, whilst a big step in the right direction, is not the panacea we had hoped when the chancellor made his original announcement.

The loans are accessed by applying to one of 45 approved lenders and the first problem for many businesses is that a borrowing proposal will only be eligible if the lender would consider it viable were it not for covid19 pandemic and the lender believes it will enable the business to trade out of any short to medium term difficulty.

But across the local economy including retail and hospitality, many businesses were struggling before covid19 hit and consequently may be unable to access funds.

Further the government guarantee is 80% in the event of default and anecdotal evidence so far suggests that many lenders are not relaxing their lending criteria even with the guarantee in place.

To me this seems wholly wrong the following reasons:-

• The government has of necessity suppressed business activity in most sectors of the economy for the public good. Nobody objects to this. However when businesses are closed for the good of society as a whole then the financial burden of that closure should be borne by society as a whole and not by the affected businesses. After all our own prime minster now accepts that there is such thing as society.

• The banks were rescued from the consequences of their own folly by the taxpayer in 2008 and now is the time for them to repay that gesture by relaxing their lending criteria and sharing the risk if it is to be borne by the business community through a loan scheme.

• The offer of guaranteed loans rather than substantial grant aid to business does not replace the turnover lost during an enforced shutdown. It merely provides temporary cash flow support which the business must repay which means it is those businesses not the government or the banks that will ultimately bear the cost of the shutdown

Despite my reservations, the scheme will benefit many businesses particularly in the short term when taken in conjunction with the ability to furlough staff on 80% salary which is recoverable from the government.

However it is likely to be of less assistance to smaller businesses seeking to keep trading and so I would also like to see the Small Business Grant Fund, presently available to retail hospitality and leisure extended to other affected sectors.

Martin Davies,

Chairman

Bournemouth Town Centre BID