SNP MP Owen Thompson will today (Thursday 5th November) lead a debate in the House of Commons calling on the UK government to take action to tackle debt for businesses arising from support schemes – particularly the coronavirus business interruption loan scheme (CBILS).
Under CBILS, lenders are allowed to set their own interest rates up to a maximum of 14.99%, meaning that wide discrepancies have crept in between the CBILS rates offered by high street banks and those available from alternative finance providers – meaning that instead of saving businesses, it is crippling them with debt.
The Midlothian MP will also renew the SNP’s call for a common framework for debt recovery under the Bounce Back Loan Scheme, as well as write down debt for firms not yet delinquent.
Commenting, Owen Thompson MP said:
“The support schemes are supposed to be saving businesses, not putting them under or crippling them with debt. The UK government needs to implement a short-term financial injection for businesses instead of loans, and write down debt for firms not yet delinquent.
“Many companies are not taking on CBILS or BBLS loans because having more and more debt around their necks is the last thing they need. SMEs in my constituency have told me applying to these schemes is an absolute last resort. Changes to the schemes that have been announced by the Treasury so far do not go far enough to see businesses through to the end of the crisis.
“Restrictions are being reintroduced across the UK and debt and desperation is rising, yet at the same time support is being cut, withdrawn or very reluctantly extended without due time to plan and prepare. Those excluded remain ignored and banks are getting tetchy about lending again.
“There has never been a more crucial time for the Chancellor to review the effectiveness of the government-backed loans and support, and make sure we better meet the needs of everyone across the UK.
“I am urging the Chancellor to act now to prevent a debt crisis, boost support for business and stop more jobs and livelihoods going up in smoke.”