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Hauliers are struggling to access loans via the government’s Coronavirus Business Interruption Loan Scheme (CBILS) which could leave hundreds of operators facing financial ruin, the RHA has warned.

The news comes on the same day as the road transport industry sent a joint letter to prime minister Boris Johnson pleading for extra help during the coronavirus pandemic to prevent “widescale business collapse that could reduce capacity by as much as 50%”.

The CBILS launched on 23 March and aims to support the UK’s six million SMEs during the pandemic by offering loans of up to £45m from a pot of £300bn. Firms can access the money via 40 approved lenders with 80% of the loan guaranteed by government.

However, since its launch, only 6,020 of 28,460 applications have been granted, amounting to just £1.1bn of loans.

Questions have also been raised as to why, out of over 300,000 informal enquiries, just 28,460 formal applications have been received so far, with the Confederation of Small Businesses accusing the government and the banks of making the application process too onerous and complicated.

The RHA wants the UK government to follow the example of the Swiss government which guarantees 100% of its COVID-19 business loans, removing any risk from the banks.

RHA policy director Duncan Buchanan told “We cannot blame the banks entirely. They are trying to protect themselves. They are being asked to help fund millions of businesses across the economy but with only 80% guaranteed by the government – that has to change.”

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He said the inability to access the loans is threatening hundreds of haulage businesses across the UK.

“This scheme is just not working – it is clearly not working since only around £1bn of the £300bn made available by the government under the scheme has been released.

“Our members are telling us that the banks are denying them access to these funds. The banks are telling them they are not entitled to these loans and are offering other loan products on different terms and that is unacceptable.”

Pointing to the launch today of the government’s furlough portal which will allow businesses to apply for 80% of furloughed workers wages, Buchanan added: “The inability to get a loan, combined with the unacceptably long time it has taken for the government to provide a way of accessing government funding towards paying furloughed workers wages, is putting businesses that were financially viable before COVID-19 under tremendous strain.

“These schemes are just not fit for purpose in this industry where many operators pay their drivers on a weekly basis – these schemes do not work for high asset, low margin businesses such as the haulage industry.”

RHA is warning that unless the government acts to make access to CBILS loans easier the UK’s economic recovery will be compromised.

“If 50% of the national fleet is locked up because companies have gone broke for lack of a loan then it will be very difficult to restart the economy and the UK’s recovery will be seriously slowed,” Buchanan said.