Simon Morgan: new loan scheme doesn't go far enough for miniples

A new 100% government-backed loan scheme was announced last night for small businesses, up to £50,000, and interest-free for the first year.

Previously I’d said that the government lending schemes came with a bit of a sting in the tail, in that they required 20% security.

Last week I called on the government to change the required security to perhaps 5%, because there are some very high risks. We don’t know when travel is going to return and there is a lot of uncertainty around destinations.

The coronavirus crisis will cost Tailor Made Travel £1 million, and I have been faced with giving £200,000 of personal security. So I’m blindly borrowing £1 million at the moment and underwriting 20% of that in order to retain my team and keep plates spinning.

So this announcement is welcome and should massively benefit single agencies, and those with two or three stores, as well as most independent traders in other industries.

However, for us, we need the government to go further.

Split between 20 premises, the loan would only amount to £2,500 per store, so the announcement is not quite so useful for miniples.

Don’t get me wrong, this is a great start, but we need our governing body Abta to persuade the government to apply the rules to mid-sized retailers too, perhaps with a “per location” or “per employee” rule to scale it up.