Coronavirus: Small business group calls for greater support from Government

By James Ridler contact

- Last updated on GMT

Young Foodies has called for greater clarity on the types of support small businesses can recieve
Young Foodies has called for greater clarity on the types of support small businesses can recieve

Related tags: coronavirus

The UK Government has been urged to provide greater support for small food and drink businesses in the wake of the COVID-19 outbreak, as these are predicting at least a 33% loss in revenue as a direct result of the virus.

In an open letter to Prime Minister Boris Johnson, Young Foodies – a community for small and medium sized enterprises (SMEs) and challenger brands in the food industry – highlighted the inadequacies in the support schemes outlined by Government last week for businesses struggling during the pandemic.

According to the letter, co-signed by Young Foodies founders Thea Alexander and Chris Green, the support was largely not applicable to or beneficial for the businesses the group represented and that these brands were at significant risk of falling through the cracks of current Government measures.

This had made it more difficult to small businesses that had been de-prioritised by retailers in favour of bigger brands and commodities, compounded by the overnight loss of trade with the foodservice, leisure and hospitality sector.

Alexander and Green listed four key concerns from Young Foodies’ members in response to the perceived lack of Government support.

Calls for greater clarity

First, it called for greater level of communication and clarity, so that challenger brands could know whether or not they were eligible for support.

Young Foodies also noted that it members were being forced to take up loans with 100% personal guarantees out of desperation, or worse, being refused loans altogether.

Its third concern was with small food businesses being unable to apply for Government grants, since they did not pay business rates.

Finally, concerns were raised over the lack of clarity on whether the Government would support challenger brands that had credit risk from the sectors most affected by COVID-19, such as airlines and foodservice.

“Along with addressing these concerns, we are asking the Government to provide support through PAYE, NI or VAT tax breaks, not deferrals, to allow small businesses to recoup some of the losses they are suffering”,​ read the letter. “We also ask for the provision of an alternative to the EFG programme that works for start-ups, as this will be crucial for these businesses to survive the coming months.

“Thus far, the Government has focused its COVID-19 support measures on hospitality, leisure and retail sectors. Without extending and tailoring that support to the entrepreneurial businesses powering them, we will lose a vital part of our food and drink industry, go back 50 years in innovation, and risk many, many jobs.”

Revamp to loan scheme

Young Foodies’ letter comes as Chancellor Rishi Sunak announced a revamp to the Government’s emergency loan measures by relaxing the criteria for eligible businesses, making them more accessible for SMEs.

The Chancellor has extended the Coronavirus Business Interruption Loan Scheme (CBILS) so that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time.

Lenders will also be prevented from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals. The Government will continue to cover the first 12 months of interest and fees.

Commenting on these changes, Sunak said: “I am taking further action by extending our generous loan scheme so even more businesses can benefit. We have also listened to the concerns of some larger businesses affected by COVID-19 and are announcing new support so they can benefit too.

“This is a national effort and we’ll continue to work with the financial services sector to ensure that the £330bn of government support, through loans and guarantees, reaches as many businesses in need as possible.”

Related topics: COVID-19, Operations

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