Big banks delay in processing COVID-19 loan applications ‘absolutely scandalous’ says Flintshire business leader

One of Flintshire’s top business leaders has slammed the big banks for their slow processing of coronavirus business interruption loan applications. 

The scheme was put in place to help small to medium-size businesses in the UK whose cashflow has been decimated by the COVID-19 outbreak.

Askar Sheibani, chairman of Deeside Business Forum said that despite the UK Government’s generous support, “there are still a large number of SMEs in a dire state of crisis.”

The coronavirus business interruption loan scheme (CBILS) has attracted criticism from MPs and business groups who are concerned over the slow pace of lending and the difficulty some small businesses have had accessing it.

CBILS was set up to offer loans to firms with a turnover of up to £45m. Companies can access the money through more than 40 approved lenders and 80 per cent of the loan is guaranteed by the UK government.

Mr Sheibani, who is also CEO of Deeside based Comtek Network Systems, said: “Sadly, businesses are still receiving very little support from their banks.”

“The delay in processing Coronavirus Business Interruption Loan applications is absolutely scandalous.” He said.

Banks do not want to be put under pressure to take the 20 per cent risk on loans above £50,000.

After all, these banks have large foreign-based shareholders from countries such as Qatar, Abu Dhabi, China and the USA, with no interest in the UK’s economy or our communities.” said Mr Sheibani.

“In contrast, we are receiving praise for the publicly-owned Development Bank of Wales (DBW).” He said.

“The DBW is processing loan applications at a speed not seen anywhere else in the UK. They have rescued a large number of small, viable businesses in North Wales.”

Citing an example from one Deeside Business Forum member,  Mr Sheibani said, “they applied for a UK Government guaranteed CBILS loan on 24th March (over a month ago) through Barclays.

The company is an engineering firm with over 50 highly skilled employees. It has been profitable for well over 10 years, has a strong balance sheet and is well established in North Wales.

It exports all over the world. Barclays, after delaying through forensic scrutiny of the company’s accounts and financial forecasts, finally insisted that the only way the bank would consider their CBILS application was to pay substantial fees to an external firm of accountants.

These accountants would then further forensically dissect their finances and provide a report to the bank for consideration, all with no guarantee of the application being accepted.

The company approached the Development Bank of Wales.

The DBW examined the finances of the company and its crucial past & present contribution to Wales’ economy and approved the application within two weeks, thereby saving over 50 highly skilled jobs.”

Deeside Business Forum has now formed a grassroots volunteer-based Business Advisory Team to assist with loan applications and help with legal issues.

“Our business community is strong, determined, battle-hardened and ready to fight to defend our region’s economy and prevent it from collapse.” Mr Sheibani said.

“Our region is the only area within the United Kingdom where businesses and individuals, with a massive pool of expertise, are uniting together to help advise, save and revive our businesses in these most difficult times.

We have lawyers, former bankers, accountants, technologists, alternative finance providers, and organisations with expertise in rescuing and restructuring companies, all offering their independent support for free.” Mr Sheibani added.

For more information contact: Business.Advice@deesidebusinessforum.co.uk