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We must expand and accelerate CBILS support to increase business survival rate amid the coronavirus pandemic says CIMA

22 April 2020, London – The Chartered Institute of Management Accountants (CIMA), the world’s largest body of management accountants, calls on the Government to address the shortfalls of its Coronavirus Business Interruption Loan Scheme (CBILS) to help improve the survival rate of small and medium sized enterprises (SMEs) in the short- to medium-term. 

Andrew Harding, FCMA, CGMA, Chief Executive – Management Accounting, said:

“The UK Government has already announced a number of generous, efficient measures to support individuals, businesses and the economy as a whole. However, we are now clearly seeing that some of the mechanics do not work.

“With just only 12,000 loans approved under the Coronavirus Business Interruption Loan Scheme, many financially-viable UK businesses are still unable to access the urgent financial support that they need to survive this crisis. 

“Banks, which a decade ago were at the centre of a global crisis, now need to step up their game by speeding up their loan application processes and redeploying staff from other areas to deal with the high volume of enquiries. Efficient and effective delivery of financial support to struggling businesses should be the norm, not the exception.”

  1. Increase the Government’s loan guarantee to 100% for loans under £250,000, meaning that banks could forego affordability checks and would only need to perform regular fraud and economic crime checks. This would significantly reduce loan-processing time and enable SMEs to have quicker access to working capital and help with immediate, critical cashflow issues. It is a lifeline that businesses in Australia, New Zealand and Switzerland have welcomed.
  2. Issue interest-free and fee-free Coronavirus Business Interruption Loans equivalent to the borrower’s revenues for the last three months under the condition that the borrower previously banked with their CBIL issuing bank. This would allow for revenue receipts and bank transactions to be easily checked, process applications online through existing banking systems and fast-track the delivery of financial support to vulnerable SMEs. 
  3. Buy all Coronavirus Business Interruption Loans through the Bank of England from banks on issue at par value and offer a margin to the banks. This would incentivise banks to accelerate processing times and manage the loans through to full repayment.