The Liberal Democrats are leading a cross-party call for the Business Secretary to provide clearer guidance to lenders regarding Business Interruption Loans, following reports that lenders have been slow to approve loans to struggling businesses due to extensive due diligence processes.
Liberal Democrat MP Wera Hobhouse has been joined by over 20 MPs from across the political spectrum in writing to the Business Secretary to call for the additional guidance.
The letter asks that the Government sets out the “minimum level of due diligence required” to underwrite loans, criteria which would enable lenders to process applications at a faster pace. This would help to ensure business owners benefit from the scheme as soon as possible.
Wera Hobhouse, Liberal Democrat MP for Bath, said: “Business Interruption Loans offer a much-needed lifeline to businesses which would otherwise face collapse given the COVID-19 crisis. However, lack of clarity on the terms for these loans has slowed access to cash. If nothing changes, we may see many successful businesses fold before their loans are even approved.
“The Secretary of State for Business must urgently clarify minimum requirements to underwrite these loans, so that lenders have the confidence to process applications rapidly, channeling funded to where it’s needed and keeping businesses afloat.
“Failure to help speed up the lending process risks thousands of businesses – the lifeblood of our economy – collapsing in the midst of the current economic crisis.”