The CEO of £100m-turnover marketing agency Gyro International, Richard Glasson, says: “I think it’s a incredible case of locking the stable door after the horse has bolted. I honestly don’t believe it’s going to make a substantive or meaningful difference.”
The government’s package comprises a working capital scheme to secure up to £20bn of short term bank lending to companies turning over up to £500m, an enterprise finance guarantee scheme that will secure up to £1.3bn of additional bank loans to small firms with a turnover of up to £25m, and £75m to invest in small businesses that need equity.
James Frost is the founder of online marketing agency Coast Digital, which turns over £15m. He broadly welcomes the initiative but adds: “The money should only be available to support viable, well run businesses. It would be entirely inappropriate to provide financial support to businesses that have over expanded, borrowed too much money, or quite simply don’t have a viable business.
“It should not be the responsibility of the tax payer to foot the bill for poorly managed businesses.”
Paul Lees, the founder of £4m-turnover conference call company PowWowNow, sees the initiative as a good solution to the funding problem. “But we have to suck it and see. I don’t think the government should have committed more money than this as that would probably make the value of the pound worse,” he says.
Lees is concerned, however, that the application process for the programmes will be onerous. PowWowNow successfully applied for money under the Small Firms’ Loan Guarantee Scheme but Lees notes it was a tough ask. “I think it’s going to be harder this time around,” he says.
Glasson adds: “I imagine there’s going to be a huge number of hurdles to clear before you see any of the money – it will come wrapped up in bureaucracy. I think it’s going to take a lot of time and that the qualifying criteria will be difficult.
“I hope that some companies who otherwise would have gone bust will be rescued but I think this won’t affect the vast majority or organisations."