![\"pound](\"https:\/\/newsblogs.ihbc.org.uk\/wp-content\/uploads\/2019\/08\/pound_sign_red.png\")
Government-backed loans to construction firms must be streamlined to avoid a ruinous contractor liquidity crunch in the coming weeks.<\/h3>\nGovernment-backed loans to construction firms must be streamlined to avoid a ruinous contractor liquidity crunch in the coming weeks.<\/h3>\n<\/p>\n
Construction Enquirer<\/em> writes:<\/p>\n Research among construction businesses of all sizes and types has revealed a serious logjam in loan applications and a high-level of rejections.<\/p>\n Construction leaders warn a cash crunch will hamper the return to work and trigger a wave of business failures.<\/p>\n The Construction Leadership Council\u2019s Covid-19 Taskforce survey found just 12% of applications for Government-supported loans have been approved so far.<\/p>\n Around\u00a030% of applications have been knocked back, while 58% of firms remain on tenterhooks awaiting a decision.<\/p>\n Finances are under pressure from both the current suspension of many projects, and the need to invest soon to restart works.<\/p>\n Small and medium-sized firms are particularly hard-hit as they often do not have the resource to wade through the current application process, shutting them out from much-needed support.<\/p>\n The task force proposes that simple guidance is made available, helping businesses to get a decision.<\/p>\n Some small businesses will benefit from the recently announced Bounce Back Loan scheme,\u00a0 but many construction firms will be looking for support above its \u00a350,000 threshold.<\/p>\n Now construction leaders are calling on Government to step in and guarantee 100% of loans under the Coronavirus Business Interruption Loan Scheme.<\/p>\n This would ease pressure on banks to run a fine-tooth comb over every application, speeding up the release of funds that could save SMEs across the sector.<\/p>\n The taskforce also recommends that banks should prioritise applications from firms supporting essential works \u2013 like hospital and utilities construction \u2013 if they are facing immediate hardship.<\/p>\n CLC joint chair Andy Mitchell said: \u201cThe Government has done an astonishing job putting in place ground-breaking financial support to UK businesses in very short order.<\/p>\n \u201cThe Coronavirus Business Interruption Loan, Coronavirus Large Business Interruption Loan Scheme and Covid-19 Corporate Financing Facility are a shot in the arm for our sector and UK plc.\u201d<\/p>\n \u201cWe want to help make sure this vital support makes its way into the industry, providing short-term liquidity as companies get back to work after the Covid-19 crisis.<\/p>\n \u201cWe hope to work with the Government and lenders to make sure this happens\u201d<\/p>\n Hannah Vickers, chief executive at the Association for Consultancy and Engineering said: \u201cWe looked at Germany which has a single streamlined process only doing its own checks on loans above \u20ac3m and on a fast-tracked self-certificated basis for loans below \u20ac10m.<\/p>\n \u201cBy moving towards a similar model in the UK we can save many vulnerable businesses in our sector\u201d.<\/p>\n