Easington MP Grahame Morris has made representations to the Chancellor about issues with the Coronavirus Business Interruption Loan Scheme (CBILS), and the consequences for small or medium-sized enterprises (SMEs).

The letter welcomes the Government’s recent decision to expedite loans to small business. However, it notes a major problem with the CBILS, due to the absence of several major UK lenders to SMEs from the list of accredited providers of revolving finance and overdrafts under the scheme.

The lenders offering revolving finance and overdraft facilities through the CBILS were: Bank of Ireland, Dansk Bank, HSBC, Santander, Starling Bank, and The Co-operative Bank. However, Barclays, Lloyds, Natwest and Virgin – four of the UK’s major lenders to SMEs – are among those who are not accredited to provide overdrafts under the scheme. MPs are yet to receive an explanation for the absence of these lenders.

The letter highlights a case from the construction sector, whose bank pressed a company towards a commercial overdraft because they were not accredited to provide overdrafts under the CBILS. The letter also reports delays in processing accreditation of institutions under the scheme, and calls for urgent action to speed up the process.

The letter urges the Chancellor to investigate the absence of major UK banks from accreditation to provide overdrafts under the CBILS, and address this to ensure that not just micro-businesses, but many more SMEs, can access quickly the finance they need. It emphasises that this ‘will be one of the fastest ways to get money to the places that it is needed in the economy, building on the existing links between bank client account managers and SMEs.’

Grahame Morris MP said, “The Government must address the absence of most of the UK’s major banks from accreditation for overdraft approvals under the scheme. Small and medium-sized businesses stand to suffer under the current state of the CBILS. These businesses must receive the funding that they need.”