Banks are taking advantage of the coronavirus crisis

ICSM Credit's Ian Carrotte: banks are taking advantage of businesses in trouble due to the coronavirus crisis

Thousands of small and medium sized firms along with many self-employed people will go bust this year due to the coronavirus shutting warns ICSM Credit’s Ian Carrotte.

He said: “Chancellor Rishi Sunak said two weeks ago that businesses would be able to walk into bank branches and discuss Coronavirus Business Interruption loans of up to £5m to help them survive the shutdown. This is window dressing as the truth is banks see an opportunity to make money with high interest rates, ask for security like the title deeds of a home or simply say no.

“There’s anecdotal evidence that some banks are charging 30% interest and they are taking advantage of the situation. It’s easy for politicians to make these statements but harder to make them happen.”

Online Simply Business analysed official government data over the five-year period 2014 to 2018 to get the average annual rate of business closures, which stands at 10.8%. This means 632,889 businesses with between 0 and 249 employees could collapse this year and that is before the coronavirus crisis took hold. The BBC business section quotes figures from Corporate Finance Network who say that between 800,000 and a million businesses nationwide may soon have to close based on more recent data they have access to.

The BBC’s Andy Verity reported: “The findings echo similar reports from other business groups, estimating that up to a fifth of businesses could close if the lockdown lasts a month or more. Bank say they're following rules set by the government, which mean firms can only get the emergency loans if they can't borrow in a normal commercial way, like borrowing against the value of a property.

“Businesses wanting to borrow more than £250,000 are being told by banks that directors must sign personal guarantees. That means if the loan goes bad owing to a prolonged shutdown, their personal property is on the line.”

A spokesperson for UK Finance, the bank trade body, said: "Lenders are working hard to get financing to all businesses who need it as quickly as possible and are using the Coronavirus Business Interruption Loan Scheme (CBILS) where appropriate, with some funding having already been provided under the scheme.

"All lenders will take into account a business's individual circumstances when considering applications and many business loans can be provided either unsecured or secured on business assets."

Ian Carrotte said for businesses looking to survive one of the best options was to join the ICSM Credit circle as it has up to date credit intelligence on the commercial sector. For less than the cost of a tank of diesel firms large and small can get information on late payers and companies (often household names) in trouble.

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For details about ICSM Credit call 0844 854 1850 or visit the website or email Ian at on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website or send an email to

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