WITH first light at the end of the coronavirus tunnel almost in sight, it is quite right that the pandemic lockdown has been extended to deal decisively with Covid-19.

However, the impact of the delay is particularly challenging for all businesses, especially many small and medium-sized enterprises (SMEs) who don’t have the scale or funds to manage their way through the crisis.

In Scotland there are 354,125 small and medium-sized enterprises, providing an estimated 1.2 million jobs. According to National Statistics, SMEs account for 99.3% of all private sector businesses, 55.4% of private sector employment, and 41.5% of private sector turnover.

Given the importance of small and medium-sized enterprises, getting government financial support right in this fast-moving crisis is paramount.

This week Scottish Finance Secretary Kate Forbes updated the support to SMEs from the Scottish Government with an extra £100m of funding for self-employed people and firms not covered thus far.

Rules were also changed to deal with businesses operating from more than one property. Adapting the support is good thing, just as the UK Government has followed the lead of the Scottish Government in supporting the fishing sector is to be welcomed.

The major schemes to support business operate at a UK Government level, and frankly they are not delivering quickly enough for business of all sizes and this needs to change fast.

If it doesn’t, then we are going to see tens of thousands of businesses of all sizes going bust.

In the UK, only one in five businesses which has applied for an emergency loan has been successful so far, with more than half of the loans coming though one financial institution – the Royal Bank of Scotland.

Even after loans are approved, many businesses haven’t yet received the cash.

Different concerns about business support have come from the Federation of Small Business (FSB), British Chamber of Commerce and Institute of Directors.

The former Bank of England governor Lord Mervyn King has warned that something has “gone wrong” with the UK Government’s emergency bailout loans system and he is “worried” about the delivery of the scheme.

Speaking to Sky News he said: “The economy will recover quickly only if we can keep the businesses that existed at the beginning of it still functioning and still able to pick up the reins when the epidemic is over. If we find so few business loans being granted, something has gone wrong.”

With time running out for many firms, the UK Treasury has already had to alter its criteria to disperse funds more quickly to businesses.

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Personal guarantees that put the property of business owners at risk have been banned. Similarly, intervention was needed to stop controversial requirement for banks to offer loans at commercial interest rates (some up to 12%) – to eligible businesses before offering a Coronavirus Business Interruption Loan Scheme (CBILS) application.

Meanwhile everybody is pointing to the success of Switzerland, which has managed to introduce a 100% government support scheme, administer it quickly and deliver to businesses efficiently.

Support has already delivered £12.5 billion of loans to 76,000 small businesses.

Swiss businesses only have to fill in a one-page form, and some have reported emergency liquidity transfers in as little as 30 minutes.

According to the Financial Times the success “is drawing attention elsewhere in Europe, with Swiss banks and the government in contact with European counterparts in recent days over how the scheme is structured”.

Germany is also operating a 100% government-backed support scheme, where applications take only minutes to complete and funds are transferred within days.

In neighbouring Austria, the first aid hardship fund has been widened to provide easy quick support for the self-employed and small businesses, including those which started trading this year.

Payments for the first month of the scheme have already been dispersed to 130,000 applicants and the scheme has been doubled in size to €2bn (£1.7bn).

With the Swiss, Germans and Americans all now guaranteeing loans 100% to businesses, the time has come for the UK to do likewise, as well as providing smaller loans for smaller businesses.

Carolyn Fairbairn, director general of the CBI, is right to call for the UK Government to do more to help smaller firms.

On BBC Radio 4’s Today programme she said: “We think the other area it is worth looking at hard is the really small loans – below £25,000 of loans – where we have many, many small businesses we’re hearing from all the time who are not able to access the loans.”

Time is running out for many businesses because of the economic impact of the coronavirus lockdown, especially small and medium-sized enterprises.

The UK Treasury needs to follow the lead of the Swiss, Germans and American 100% loan schemes, and they need to do it quickly.

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