Concerns raised over bank support for firms in crisis

Ms. McLaughlin said she has been in touch with several worried local businesses who are concerned about what they are hearing from bank in connection with the operation of UK government support schemes to help them to survive the Covid-19 crisis.

She stated that banks have told businesses they can only access the Coronavirus Business Interruption Loan Scheme if they fail to meet criteria for a loan from that bank under normal lending terms, which may be significantly more expensive and which the business may not wish to engage in.

Some banks, businesses have reported, have also told them they are not engaging in the Coronavirus Business Interruption Loan Scheme, or are only doing so for sums much less than the £5m maximum specified by the government.

Other local businesses have been left in limbo but many are too large to access the Coronavirus Business Interruption Loan Scheme, but not large enough to access the Bank of England scheme for larger companies.

Some banks meanwhile will only consider applications under the Coronavirus Business Interruption Loan Scheme from existing customers, while businesses and homeowners with mortgages who are being given holidays on loan repayments, are not being given a correlating extension on the length of term of the repayment. Consequently they are faced with higher monthly repayment bills at the end of the crisis, when they are still likely to be struggling financially.

“We believe that these are systemic problems with the government’s measures of support, which need to be addressed by the UK government with participating banks and building societies,” the Derry MLA said.

“It is our understanding that these problems are not unique to Northern Ireland and are the same for businesses operating in Great Britain.

“The current situation is very dangerous for many Northern Ireland businesses, across micro-enterprises, SMEs and our larger firms. I would ask you to make urgent representations to the UK government to pressure banks to act in ways that are much more helpful to the economy.”

Minister Dodds announced last week that grants of £10,000 will be provided to all small businesses eligible for a Small Business Rate Relief Scheme, and £25,000 to retail, tourism and hospitality businesses. The Minister also said supporting all local businesses affected by the COVID-19 pandemic was a priority for her Department and the Executive.