FSB: More needs to be done to help SMEs

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New lockdown funds don’t go far enough to help small businesses in crisis, the Federation of Small Businesses (FSB) said today.

Responding to the new lockdown grants being made available to small businesses in the retail, hospitality and leisure sectors in England, FSB national chair Mike Cherry said:

“While this additional financial support will be a lifeline to 600,000 businesses and therefore has value, there is a need for a plan that matches the scale of the economic damage we are seeing.

“For many it just won’t be enough for businesses who are already under the cosh and on the brink.

“These funds come after a disappointing festive period and are followed by a last minute lockdown and do not go far enough to match the scale of the crisis that small firms are facing.

“There remain too many groups who need more support to weather this storm such as the newly self-employed, those in supply chains and company directors. We continue to call on the Government to create a Directors Income Support Scheme, mirroring the Self Employed Support Scheme, in the form of a taxable grant for directors of limited companies calculated at 80% of three months average monthly trading profits, paid out in a single instalment and capped at £7.5k.

“We also need to see the government make clear its plans for more finance capabilities made available to those who have used their allocations through Bounce Bank Loans as well as extending the period before repayments begin.

“This lockdown is expected to last for some time, even when restrictions ease, many small firms will be unable to function at 100%, if at all. Which is why the government should create a Spring Economy Plan to help firms get through to drive a vaccine-enabled recovery.

“After clawing their way through 2020, the start of the new year looks set to be an even worse one for many. Small businesses are the backbone of our economy, and it is absolutely vital we support them in every way possible until the crisis finally begins to ease.”