// Up to 1/3 of independent retailers may struggle to reopen post-lockdown without loans, experts warn
// Warning comes after retailers faced delays in accessing emergency government loans
// The coronavirus pandemic prompted the lockdown, which led to plummeting footfall & retail sales
Experts of have warned that up to a third of independent retailers may struggle to reopen post-lockdown after reportedly facing delays in accessing emergency government loans.
The British Independent Retailers Association (Bira) said that the funding lifeline, thousands of independent retailers would not be able to replenish stock and would have nothing to sell when high street shops can re-commence trading after lockdown ends.
Various other industry leaders echoed the warning, saying that the Coronavirus Business Interruption Loans (CBIL), which were announced last month ago as part of a £330 billion support package as a result of the pandemic, are still not coming through.
READ MORE:
- Retail footfall declines at sharpest rate in March
- Consumer confidence plunges at fastest rate in 40 years
- Coronavirus: Retail sales suffer “worst decline on record”
Reports have suggested that £3 billion worth of CBIL loans have been paid out.
“The delays are just horrible for retailers, for any business, and they are rapidly running out of cash, it is as simple as that,” Bira chief executive Andrew Goodacre said.
“Those loans were designed to provide short-term cashflow for companies that were told to shutdown with four hours’ notice.
“But they are just not coming through.”
Federation of Small Business chairman Mike Cherry said: “Many members tell us it’s difficult to get to the formal application stage — banks are still too slow to respond to enquiries.
“Even if you do get your forms through, the process is very demanding.”
London Chamber of Commerce and Industry boss Richard Burge said banks needed to guarantee all existing business customers interest and fee-free overdrafts for the next six months while they waited for CBIL loans to be approved.
Shadow business secretary Ed Miliband meanwhile urged the government to speed up the loans process by increasing its underwriting guarantee from 80 per cent-100 per cent of the advance, as is the case in Switzerland.
Writing in the Evening Standard, he said: “Its scheme paid out 12 times more money in business loans in one week than we have in three.
“This complete underwriting by government would take the risk off the shoulders of the banks… The process of underwriting needs to be simplified — in Switzerland it’s a one-page form.”
The warnings come as UK retail experiences plummeting consumer confidence, and record-low sales figures and footfall.
Overall footfall dived by 44.7 per cent in March, according to the latest BRC-ShopperTrak footfall monitor, marking the sharpest footfall decline ever decline for the month.
Meanwhile consumer confidence fell of a cliff in the last two weeks of March, tumbling at the fastest rate since records started more than 40 years ago, according the GfK consumer confidence index.
On the other hand, retail sales plummetted at their fastest rate on record in March, with overall sales falling by 4.3 per cent, according to the BRC-KPMG retail sales monitor.
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