Support must be given to “stranded middle” businesses who are not eligible for the government’s coronavirus relief package and are at risk of going bust, according to the CBI.
The government’s £330bn business interruption loan scheme is open to companies with revenue of less than £45m, while large investment grade companies can access the Bank of England’s (BoE) coronavirus bond-buying prorgramme.
The programme, called the covid corporate financing facility (CCFF), will see the BoE buy up companies’ short-term bonds, easing their need for cash.
However, CBI chief economist Rain Newton-Smith told the Treasury Select Committee today that many large employers cannot access economic relief in either of these forms and are at risk of going bust.
It comes as City A.M. also reported today that there had been a surge in companies contacting ratings agencies in an attempt to gain investment grade status so they could get access to the BoE’s bond-buying programme.
Newton-Smith said: “We have a lot of distressed businesses that are very big employers around the UK.
“A lot of them are very large regional employers – some of them might be supporting 3,000 jobs in the South West – and those medium-sized businesses that don’t have a scheme that’s open for them at the moment.
“We feel it’s an issue that needs to be addressed at speed and at scale.”
A Treasury source told City A.M. that the government was working on providing a package for businesses not currently covered, but there was no date set for any announcement.
On 20 March Sunak also signalled that more help was on its way for struggling UK businesses.
“Further measures will be announced to ensure larger and medium sized businesses will be able to access the credit they need,” he said.