As in 2008, the banks are taking the money the government has given them to help small businesses and are refusing to loan it out:
Nearly a fifth of small British businesses could be forced to close in the next four weeks after running out of cash amid complaints banks are refusing to give them government-backed coronavirus loans.
Many bosses said banks had declined them emergency payments over claims they had not met the required criteria while others could not get through on the phone or were told the money would take weeks to arrive.
Mark Fuller, who owns popular celebrity haunt Karma Sanctum in Soho, said he was unable to apply for funds because he could not guarantee his businesses would be able to start paying it back after six months in the event of a lengthy shutdown.
‘The loan is under normal business conditions, which is fine but then don’t suggest otherwise,’ he told MailOnline. ‘I have already been told by the government and Barclays that the only way to receive a loan is by cutting my staff.’
Other bosses were declined payments for having significant cash reserves, despite fears these would not be enough to last out a lengthy lockdown, or because they owned properties that could be used as collateral for a regular commercial loan.
Scott Littlefield, from SPL Management, a property company based in Poole, told MailOnline: “This scheme is not really fit for purpose. Our bank, Nat West, is virtually non-contactable at the best of times and the staff in branch can only deal with personal banking issues, not business. They always say to approach your relationship manager although all relationship managers were done away with in 2010.”
If you think the US banks are bad, you should try dealing with a UK bank. They make it almost impossible for a UK-based company to even get a bank account. And, as in the US, they refuse to play what is supposed to be their part in crisis-amelioration efforts.
The governments need to stop looking to the banks to help solve the problem. They ARE the root of the problem, and therefore cannot be part of the solution.