Norfolk boss fears firms will go bust due to bank delays
PUBLISHED: 13:44 03 April 2020 | UPDATED: 09:13 04 April 2020
The owner of Norwich’s Crystal House has said firms will go out of business as banks delay in getting coronavirus loans sorted.
Richard Pratt, who owns the building formerly used by Waring’s and now occupied by Bullard’s gin distillery, Cattle Market Street, said his bank, NatWest, had reduced his business overdraft at a time when he was selling one of his businesses amid the coronavirus outbreak. As a result he is looking to bank elsewhere.
Other bosses are struggling to get coronavirus business interruption loans sorted – promised by the chancellor who’s now stepping up pressure on banks to deliver.
Meanwhile, shares in banks fell heavily after they scrapped billions of pounds in dividends.
But for Jeanie Feneron, who runs the Banningham Crown, near Aylsham, time is running out. Her bank Santander has still not come through with a loan needed for her to pay her 33 furloughed staff. Two days after payday, she’s still waiting – all she’s received is an email from the bank stating it is dealing with an ‘uprecedented demand.’
Mr Pratt, who also runs an engineering firm in North Walsham, which is still open for essential business, said he had made 20-30 calls to his bank when they told him they were reducing his overdraft limit by £150,000. “My theory is that if the banks take the money off my overdraft, and others, and then lend it as a deposit to someone else in need, they are profiteering from coronavirus.
“We are financially stable but cashflow is criticial to some businesses which are going to cease trading, wipe off their liabilities and try and pick up business after. A lot of firms are going to go out of business.”
Mrs Feneron told this newspaper if she hadn’t heard from her bank by Monday, she was going to have to use her own savings to pay her staff. “If I don’t do this, my staff are going to have to apply for Universal Credit.”
But there was one positive story from the boss of a construction firm. George Wells, director of Hartog Hutton and Tiller Properties Ltd, building homes in the Bury St Edmunds area, said he had asked for a ‘significant extension’ to his business overdraft. He’d shut down all work and furloughed 15 staff. He asked his bank, HSBC for help over the next six months and they granted it in less than two days. “I was very worried with overheads which were carrying on and thought I would run out of cash in about three weeks so I asked for an extension and they gave it to me in a day and a half. It’s been a lifeline.”
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