Government’s business loan plan ‘illogical’ claims frustrated business owner
PUBLISHED: 08:48 18 March 2020 | UPDATED: 08:49 18 March 2020
The owner of a bakery chain who fears it is “going down the pan” because of government policy has launched a fierce attack on its £330bn loan injection into UK business to prop it up during the coronavirus crisis.
Steve Magnall, co-owner of the Two Magpies, which runs four bakery-cafés across Norfolk and Suffolk, said chancellor Rishi Sunak’s measures to help businesses through the crisis would simply leave them with unsustainable levels of debt.
“The chancellor’s latest announcement does not support business at all. Why does a loan with small interest rates help? They don’t seem to understand small businesses and their needs at all,” he said.
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“France has basically written off 300bn euros in support for businesses, while our government just isn’t going far enough to help small businesses who won’t survive this without proper aid.
“Quite simply, our cash flow is very tight, so offering a low interest loan gets us through at present, but if it lasts for months, we will owe the government hundreds of thousands of pounds.
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“Our wage bill last month was £100,000. Today’s takings were down 30% and dropping. We have grown every year consistently for seven years and one statement from the prime minister yesterday and our business is going down the pan.”
He and wife Rebecca had put all their money into the business and could not afford to take on debt, he said.
The government should be supporting the employees by taking their wages on, stopping all tax collection, stopping mortgages for all until the crisis and supporting those that rent properties until the crisis is over, he said.
Instead it was offering loans which are 80% underwritten by the government.
“Why would I take a loan out when they have forced people out of our cafes and insurers won’t pay out because of clauses.
“It’s illogical and shows a lack of understanding of small business, which the Tories claim to know.”