SMEs call on the Chancellor to continue financial help

Jason Oakley, Recognise Bank’s CEO, offers some insight into what kind of support many small businesses would like to see in next month’s Budget speech.

Next month the Chancellor Rishi Sunak will take to the dispatch box and unveil his latest Budget. Last year was his maiden Budget and the Chancellor announced a package of emergency measures to help tackle the economic impact of the emerging coronavirus pandemic.

Who would have believed that almost a year later the virus would still have such a grip on the country’s health and economic well-being?

One of the more eye-catching announcements in the Chancellor’s speech last year was a “temporary coronavirus business interruption loan scheme“, now probably better known by the acronym CBILS. That scheme is still with us and, despite some early teething problems, has been of benefit to a large number of UK businesses.

However, CBILS and a raft of other financial support packages for business introduced by the government over the last year are due to be wound down in March and April*. These vital lifelines of support to Britain’s SMEs could soon be cut.

Which is why so many small businesses are now calling on Mr Sunak to announce the extension of these initiatives in next month’s Budget, according to Recognise’s research amongst 500 companies.

When we asked bosses what support for small businesses they would like to see announced in the Budget on 3 March, we found:

  • 31% of all small businesses want to see an extension to the Coronavirus Business Interruption Loan Scheme (CBILS), rising to 47% of firms in the hospitality sector
  • 28% of all SMEs want the government’s Bounce Back Loan Scheme (BBLS) to be extended, rising to 40% of retailers and 45% of property firms
  • 26% of all firms say they want the 5% reduced rate of VAT for the hospitality sector to be extended, unsurprisingly this rose to 45% of businesses in the hospitality industry itself
  • 24% of all the businesses questioned want an extension to the furlough scheme, which again rose in those sectors mostly badly hit, up to 31% of retail firms and 47% of hospitality businesses

Some companies even supported the addition of new measures to help small businesses and get the economy moving again, such as a VAT holiday for consumers. You can read the full findings here.

It’ll be interesting to see what the Chancellor announces in the Budget, because there are certainly continued economic challenges ahead. The continuation of these support packages from the government over the vital summer period could help shore up business confidence.

From my conversations with business owners and colleagues, as well as the number of enquiries Recognise gets every day, it feels like the SME sector is growing in ambition again. Our role as a lender has never been more important, partnering with intermediaries that understand the sector, offering a personal touch and lending support that has been missing from commercial banking for so long.

By working together and supporting those ambitious small businesses, we can all play a part in helping to get the economy firing on all cylinders again.

Jason Oakley, CEO, Recognise Bank 

*Applications for CBILS and BBLS are currently open until 31 March, 2021; the temporary 5% reduced rate of VAT for the hospitality sector currently applies to supplies up to 31 March 2021; currently the Furlough and Redundancy Scheme remains open until 30 April 2021.