By Scott Wright
THE strain on company cash flow stemming from the coronavirus pandemic has been underlined by a report published today, which also highlights the ongoing difficulties firms are facing in accessing Government support schemes.
Nearly 60 per cent of firms have three months cash in reserve or less, while just 2% have successfully accessed the UK Government’s Coronavirus Business Interruption Loan Scheme (CBILS), according to a weekly survey which tracks the effects of the Covid-19 pandemic on UK business.
The weekly Coronavirus Business Impact Tracker, published by British Chambers of Commerce (BCC), found that 17 per cent of firms have less than a month’s cash in reserve, with 36 per cent reporting one to three months of cash reserves. BCC, which received 701 responses to polling carried out from April 8 to April 10, said while these percentages were broadly in line with last week, they continue to underline the pressure on cash flow following the sharp downturn in activity. The percentage of firms reporting no cash in reserve was unchanged at 6%, the survey found, while the proportion of firms with 12 months’ cash in reserve remained at 6%.
Meanwhile, amid continuing focus on the shortcomings of emergency measures to support business through the crisis, BCC found only 2% had successfully accessed the CBILS, up from 1%. Nine per cent of respondents were refused loans under the scheme, with slow or no response from lenders cited as the main reason for being unsuccessful.
BCC said this finding suggests firms could still be having difficulty accessing the support through banks, despite announcements on April 2 designed to simplify and speed up the CBILS process.
The survey found 66% of respondents have furloughed staff head of the Government’s Job Retention Scheme, under which the state will cover 80% of staff wages up to a maximum of £2,500 per month, going live. Nearly one-third (31%) said they have furloughed between 75% and 100% of their workforce.
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