Last reviewed 6 May 2020
Nearly a quarter of all logistics companies face potential collapse in the next eight weeks, with 80% needing better access to the Government’s Corona Business Interruption Loan Scheme (CBILS) to survive.
This is the main finding of a poll by the Freight Transport Association (FTA), following which it has called on Chancellor Rishi Sunak to make the Scheme work for businesses across the sector.
The Association’s CEO David Wells said: “It seems banks are simply not listening to the Chancellor and are failing to process applications for financial support from stricken businesses quickly enough. The CBILS application process needs to be much faster, and more transparent, so that businesses can receive the vital support they are entitled to under the Scheme without delay.”
He highlighted that businesses across the logistics sector have seen a major decline in revenue, for some up to 100%. Many have only survived thus far by deferring payments of VAT, PAYE, National Insurance (NI) and asset lease payments.
The FTA has also pointed to worrying disparities in official figures which show, for example, that only 36,000 businesses have applied for a CBILS loan. According to the information available to the FTA, around 25,000 of those looking to apply are logistics businesses – which seems an unusually high percentage.
“With so many organisations wanting to access the scheme but not yet being counted in the number of applications, we can only assume the current quoted number of applications is so low because businesses have not managed to get past the banks to formally make an application,” Mr Wells suggested.
He has blamed red tape for preventing many businesses from taking advantage of the programme and compares the position unfavourably with France, where £17.5 billion of loans have already been approved for more than 170,000 businesses.
“CBILS is the right scheme to help distressed businesses with short-term cashflow issues,” Mr Wells concluded, “but it is simply not working, and Mr Sunak has a responsibility to the economy to sort out the issues with the programme as a matter of urgency, to prevent further damage to businesses right across the economy.”