Monthly Archives: June 2020

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Small businesses blindsided by Growth Street demanding its money back

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Originally written by Timothy Adler on Small Business
Dozens of small businesses that borrowed money from peer-to-peer lending platform Growth Street have been told they must repay their loans.
Growth Street, which has lent £17.5m of investors’ money to 116 small businesses affected, is exiting the peer-to-peer market, giving them just three months’ notice to repay their debts.
The average amount owed is £148,122, with London and the South East accounting for 41 per cent of all borrowing, according to SME financier Rangewell.
>See also: HSBC handling of bounce-back loans branded ‘shambles’ by businesses
Loans repaid will be redistributed to Growth Street’s peer-to-peer investors in quarterly instalments, with any losses shared equally.
Astonishingly, not one of the affected businesses has missed a loan repayment to date.
A letter sent by Growth Street to borrowers, seen by the Times, concedes that the wind-down is “likely to be disruptive to your business”.
Back in March, Growth Street’s peer-to-peer investors panicked because of Covid-19 and extracted their cash from high-risk lending to small businesses as fast as possible. To try and stop the haemorrhage the investor stampede for the exit, Growth Street initiated a “liquidity event”, telling small business borrowers they had to repay their loans within three months.
>See also: 20%

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Slash national insurance to keep small businesses hiring, says Sajid Javid

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Originally written by Timothy Adler on Small Business
Sajid Javid, the ex-chancellor, has thrown down the gauntlet for the Government to increase the national insurance employment allowance to £20,000 for small businesses.
Mr Javid has called for national insurance to be given a “significant temporary” reduction to make it cheaper for small businesses to take on staff.
>See also: How to reopen your restaurant, pub or hotel post-lockdown
“If we want to support and stimulate employment, then axiomatically the best option is to cut the payroll tax — employer’s national insurance,” Mr Javid said.
“Tax employment less, and all other things being equal you will end up with more of it.”
Many fear a coming tsunami of unemployment as small businesses are weaned off the Coronarius Job Retention Scheme, with the Bank of England warning of 10 per cent unemployment as Britain emerges post lockdown.
The proposal to lift the Employment Allowance ceiling is just one of scores of proposals in a paper he has written for centre-right thinktank the Centre for Policy Studies, setting out measures to boost the post-Covid economy.
>See also: How to deal with a furloughed employee who refuses to return to work
The former cabinet minister, who resigned from the Treasury in February, said

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Scottish report calls for Government to take stakes in SMEs

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Originally written by Anna Jordan on Small Business
A new report is asking the Scottish Government to take stakes in struggling firms, including SMEs.
The document, created by the Advisory Group on Economic Recovery, makes 25 recommendations based on the thoughts and opinions of hundreds of businesses.
One of the most significant is that the government must support guaranteed employment for young people, securing two years of work at the real living wage.
Other suggestions include a ‘significant increase’ in infrastructure investment, especially in digital technologies, along with targeted measures to help the tourism and hospitality industries.
SME focused recommendations highlight sector-specific banking products for small businesses and ‘differentiated solutions’ such as re-start loans, repayment plans and new deals.
The enquiry was run by Benny Higgins, the former chief executive of Tesco. Higgins suggests that Scotland will need £6bn to revive the economy – the current limit going through the fiscal framework is £450m. Investment will need to be at least 4 per cent of financial output to be effective.
Figures show that Scotland’s GDP is down 2.5 per cent in first three months of 2020 and fell by 18.9 per cent in April.
Benny Higgins said:
“Scotland faces an economic challenge of monumental scale. If we do not

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