"Loan scheme failure means fifth of our members are close to collapse," FTA tells government

Continuing delays in the Coronavirus Business Interruption Loan Scheme (CBILS) means operators are now on a cliff edge of financial ruin, the FTA has warned.

It accused the Chancellor Rishi Sunak of not doing enough to help logistics firms, five weeks after he promised to take “all action necessary” to make sure government backed loans were benefitting businesses.

David Wells, FTA chief executive said holes in companies’ cash flow were now emerging, caused by a lack of billable work from April, which would otherwise be due for payment from the middle of this month.

Wells’ said the FTA’s research showed that a fifth of its members are in danger of financial collapse within the next eight weeks, but only 5% had been successful with their CBILS applications.

He said over a third of SMEs in logistics are stuck in banking purgatory; either not eligible, unsuccessful, still awaiting a decision, or in need of more information.

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“This delay to CBILS approvals is going to get very serious very soon and is already too late for some,” said Wells.

“The scheme simply is not working for the vast majority of our members who are looking to it for vital business support.

“Lenders are failing to process applications for financial support from stricken businesses quickly enough.”

The FTA’s warning comes a week after the RHA told motortransport.co.uk it was optimistic that extra support for haulage was in the pipeline.

“There are signs that the government is finally getting it and now understands the scale of the problem,” RHA chief executive Richard Burnett said.

“There are so many hauliers going into liquidation that the recovery of the economy after lockdown will be severely affected unless action is taken now.”