Banks need to provide short-term loans to businesses waiting on government grants or more high street chains will fall, expert warns

The Staff Canteen

UKHospitality chief Kate NichoLls has warned that banks need to accelerate efforts to provide short term loans to businesses awaiting government grants, as many are on the brink of failure. 

Over the past two weeks, calls for government to do more to help companies out led to compensation packages being devised to help the economy remain afloat.

But the complexity of rolling out the schemes on such short notice means that many will wait several months before they access any funding. With little cash resources used to pay wages, they could end up racking up debt and ongoing costs irrespective of their closure. 

If more high street food and drink chains were to go bust - like Chiquito's and Carluccio's, both of which went into administration two days ago - Nicholls argued in an interview with This is Money, many would be left jobless.

She said: "Banks are not moving fast enough to get the money to businesses in dire straits. If companies have to wait two to three weeks for loans, jobs and livelihoods will be lost."

Yesterday the Hospitality Trade body leader Tweeted an infographic showing that businesses like pubs and restaurants, on average, only have a two-week cash buffer to cover their costs. 

For Nichols this should be enough for banks to 'release cash' immediately. 

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The Staff Canteen

The Staff Canteen

Editor 30th March 2020

Banks need to provide short-term loans to businesses waiting on government grants or more high street chains will fall, expert warns