UK BANKS: ARE THEY EFFECTIVELY SUPPORTING THE EVENT INDUSTRY?
Worldwide economy is suffering a forced slowdown due to the pandemic caused by Covid-19. This crisis is different from those of the last years: it is much more pervasive, it affects the entire planet and sectors.
Postponements and cancellations of trade fairs are having dramatic effects for exhibition companies and the trade fair industry around the world. The backbone of the trade fair sector are micro and small businesses and the lack of commercial activities is putting them at immediate risk of bankruptcy.
UK Government established special supports and benefits for workers and businesses during the crisis like income subsidies, loan guarantees for business, business rates, cash grants and sick pay. However the most useful and innovative resource is the Coronavirus Business Interruption Loan Scheme (CBILS) promoted by the British Business Bank. The CBILS, designed as a complement to a broader plan of government intervention in favour of British companies, aims to provide financial support to the companies affected by the COVID-19 epidemic. The program will support small and medium-sized enterprises, with an annual turnover of up to £45 million, to access loans up to £5 million for a maximum of six years.
The critical point is banks seem to hinder this process to obtain loans, which are essential for the survival of many UK companies that have no more revenue and are seeing their cashflow disrupted.
Bank lobby group UK Finance shows that on 23rd April only 16,624 applications have been approved out of 36,000 total applications. As happened to “Penny Banks”, other companies were refused the opportunity to receive a loan after submitting all the necessary documents, business plans and reports.
Until a few weeks ago the event industry was one of the major engine for the economic growth of the country: it is worth more than £14 billion to the economy, with 25,000 businesses supporting over 500,000 employees! Nowadays to overcome the financial emergency, our companies needs clear solutions from the Government and banks must take extraordinary measures dedicated to credit lines aimed at enabling companies to cope with payments, despite the progressive reduction or even absence of an income.
What is needed is to give liquidity to the financial and economic system, waiting for the industry to have the possibility to restart stronger than ever once the health emergency is over. The system of banks should recognize the high value of the event industry and act as quickly and effectively as possible thorough the implementation of measures that allow businesses facing liquidity problems.
We are all sailing in uncharted waters, but never as much as in this moment it is necessary the maximum synergy between the initiatives of the Government and those of the banking system to make sure that liquidity can reach as quickly as possible companies and their employees!