High Street banks are failing to support British industry during the COVID-19 crisis, according to a leading Carlisle businessman.
The government pledged it would spend billions to support businesses and underwrite loans to keep them going, but the banks are undermining their promises says Cedric Stonex, chief executive Chapman Bags.
His criticism has been backed by Carlisle MP John Stevenson who is calling for banks to be more supportive during the crisis.
Chapman Bags has shut its factory in Carlisle and furloughed its 25 staff for their own safety as they work together in close proximity making luxury bags which are bought across the world.
But when Mr Stonex tried to speak to HSBC about the government’s scheme for Coronavirus Business Interruption Loans he found their support distinctly lacking.
Even though the loans are being underwritten by the government he was still asked by HSBC to explore other options first including personal and family loans.
Mr Stonex said: “HSBC seemed to see this scheme as a loan of last resort and wanted to see proof that all other options has been exhausted first. They are asking directors to put their own homes and assets at risk.
“The banks are simply not playing ball. We taxpayers supported the banks in the credit crunch of 2008 which was a problem of their own doing because they got too cocky with everyone else’s money, but now we are facing problems that are completely out of our control they are not wanting to support.”
“The banks seem to be seeing this as a free for all and I think that with interest rates so low they won’t make a lot of money out it, but it is still a loan and businesses are still paying for it. You would have to go out of businesses before the government has to pay it back.
“We wanted to operate at a reduced level. We have wages to pay, but we won’t be able to claim back furloughed wages until the end of April at the earliest and we still have rent to pay, utility bills, supplier bill and other costs we can’t defer.
“I am sure that the banks will have to give in at some point but by the time they do it will be too late for a lot of businesses and a great shame for this country,” he added.
Chapman Bags’ plea for the banks to do more to support businesses has won the support of Carlisle MP John Stevenson.
The MP said: “At this critical time, it is imperative that the banks step up and support businesses. Some banks have been very supportive but others are, in my view, failing to help when it is quite clear there is a fundamentally viable business which needs some short term support and the government is offering guarantees for such loans. I very much hope that in the case of Chapmans that the HSBC will respond positively.”