Six trade bodies have sent a co-signed letter to the chancellor asking that government funding schemes are not ended prematurely.
The Finance and Leasing Association, Association of Alternative Business Finance, British Vehicle and Rental Leasing Association, Consumer Credit Association, Credit Services Association and Innovate Finance have signed the letter.
The letter said: “Now is not the time for the British Business Bank to curtail its support schemes.”
The letter explains that these schemes, unlike the Bank of England’s, "channel funding and risk-reducing guarantees through non-bank lenders", adding: "These lenders have a strong track record of serving SMEs before and during the crisis and need to keep doing so. The Bank of England’s scheme for banks runs into the Spring. The support for non-banks should do likewise."
Emphasising the damage a potential national lockdown and local restrictions can have on businesses, the letter states that SMEs are facing exacerbated uncertainty and the deterring of investment.
The trade bodies also state: “The role of government is not to pump money into a chosen few sectors and companies.”
Research from TheCityUK, which suggests that 780,000 SMEs will have unsustainable levels of debt due to the pandemic, is also referenced in the letter.
The letter adds: “Not all businesses can or should be saved. However, many businesses do deserve to survive, and the economy needs them to do so. Longer term schemes are needed to help those we need most.”
When contacted for comment, a Treasury spokesperson did not address specifics in the letter, but issued a statement saying: "As we have repeatedly said we keep our package of economic support under constant review.
“We have already provided unprecedented support worth £160bn to businesses impacted throughout this period.
“This includes government-backed loans, cutting VAT for the tourism and hospitality sectors, grants of £25,000 and the Coronavirus Job Retention Scheme, which has supported the wages of 9.6 million people so far.”