Titan Business Insurance welcomes the Government’s initiative to help SMEs, but worries that the scheme will not go far enough to make a meaningful difference to the hardship being currently experienced by many companies.
Titan Business Insurance notes that the new scheme is open to companies with a turnover of up to £50 million turnover and they will be able to qualify for a slice of a first tranche funding package of £5 billion. The eventual package will be worth £20 billion. Banks, which include Barclays, Lloyds and RBS, have guaranteed to make loans available at one per cent lower than the normal interest rate.
However, banks are not obliged to make loans to companies who ask and normal risk and lending criteria will apply, leading some critics to say that the scheme lacks real meat and will not help that many companies.
Chief Executive Officer of Titan Business Insurance, Basil Tsapralis, said:
“There’s no doubt that the SMEs in this country need help, but this latest scheme, no matter how well meaning, might completely miss the mark because it does not oblige the banks to make loans to anyone not fitting their strict lending and risk criteria. Which means that all this scheme offers is a one per cent discount on the normal borrowing rates which, for many companies, is the least of their worries.”
Titan Business Insurance deals with a wide range of the UK’s smaller to medium sized companies, and promotes its services on very competitive pricing and high levels of customer service.