Research undertaken by the Construction Leadership Council (CLC)’s COVID-19 taskforce on take-up of financial support to the sector has revealed a number of issues with the Government’s business support schemes.
Companies of all sizes and types took part in interviews and surveys for the research. A fifth (12%) of surveyed firms’ applications for Government-supported loans had been approved. While nearly a third (30%) were knocked back and 58% were still waiting for a decision.
Firms across the sector face pressure on finances from both the current suspension of many projects, and the need to invest soon if work is to restart. The research also revealed that:
- SMEs are particularly hard hit as they do not have the resources to deal with the application process.
- Small businesses may benefit from the recently announced Bounce Back Loans, however more will be looking for support above the £50,000 threshold.
To remedy these problems, the CLC proposes that:
- Simple guidance aimed at SMEs is produced to help them deal with the application process.
- Should applications from the sector remain slow then the Government should guarantee 100% of all loans under the Coronavirus Business Interruption Loan Scheme, thereby releasing pressure on banks to run a fine tooth-comb through each application.
- That banks are forced to bump applications from companies supporting essential works such as hospitals or utility improvements if they can demonstrate financial hardship.
Hannah Vickers, who sits on the Construction Leadership Council’s COVID-19 taskforce, suggested that we could look overseas for inspiration. The chief executive of the Association for Consultancy and Engineering (ACE) said: “We looked at Germany which has a single streamlined process only doing its own checks on loans above €3 million and on a fast-tracked self-certificated basis for loans below €10 million. By moving towards a similar model in the UK we could save many vulnerable businesses in our sector.”