The Chancellor, Rishi Sunak, announced small business loans relief last night which could help many businesses in the property sector, including construction.
Small businesses impacted by Covid-19 and social distancing measures are now able to borrow between £2,000 and £50,000 with the money available within days. The loans will also be interest free for 12 months.
The Federation of Master Builders have claimed that the simple micro loan scheme will help businesses that have thus far struggled to access affordable finance to help them through lockdown.
However, the FMB insist that unless an SME Support Fund issuing grants as opposed to loans is introduced, many builders will struggle to resume working once the restrictions end.
Current loans may help SME businesses to cover lost income up to now but may not provide the income necessary to finance construction restarts once social distancing measure are eased which would have an impact on the amount of new properties completed in 2020.
Brian Berry, Chief Executive of the FMB, said:
“The Chancellor has listened to local builders’ concerns about cashflow, raised by the FMB, and brought forward a simple loan scheme for viable firms. This marks a positive step when just 4% of builders were able to acquire credit through previous schemes.
“Cashflow is currently builders’ biggest headache because many construction sites remain shut. The combined challenges of accessing scarce materials, working safely in a client’s home, and protecting the health of the construction workforce, has left many firms unable to continue bringing income in. An SME Support Fund in England, and Northern Ireland, similar to the ones in Scotland and Wales, is needed to issue grants and ensure that these firms can hit the ground running post-lockdown. Builders, and the construction industry, will thrive if they are able to reinvest their profits back into the economy, rather than paying back a loan.”
The Chancellor of the Exchequer, Rishi Sunak, said:
“Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.
“This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of thousands of small businesses.”
Business Secretary Alok Sharma said:
“Our small businesses are vital in ensuring our communities thrive and will be crucial in creating jobs and securing economic growth as we recover.
“This rapid loan scheme offers additional protection so small companies across the country can get access to the finance they need immediately, as part of the unprecedented package of support we have put in place.”
