The Federation of Master Builders has called on the chancellor to provide greater support for those running small businesses who fall between the gap in schemes to support employees and the self-employed
In a letter to the chancellor, the FMB has said urged Rishi Sunak to support “those two million people who run and manage businesses and pay themselves through dividends”.
Key statistics from a survey of 589 FMB members revealed:
- 4 in 5 (80%) responders were directors of Limited companies, of which more than half (58%) receive most of their income through dividends;
- Two-thirds of directors (69%) said that 80% of their monthly PAYE salary (available as a furloughed employee through the Coronavirus Job Retention Scheme) would not provide enough support to them during the lockdown;
- Of those who said 80% of their PAYE salary was insufficient, 63% work in the domestic renovation, repair and maintenance sector, the part of the construction industry least able to continue to work in line with Public Health advice, and therefore hardest hit by the virus.
Brian Berry, chief executive of the Federation of Master Builders (FMB) said: “The chancellor has been generous in his support for workers and the self-employed in this time of crisis, but there is a core group who will miss out – those two million people who run and manage businesses and pay themselves through dividends.”
Two-thirds of builders will struggle
He added: “The vast majority of small builders have seen pretty much all their work dry up over the last few weeks, and naturally those running these companies are anxious to know how they will support themselves, their workers, and keep their businesses solvent in the weeks and months ahead.
“The support for the PAYE part of their income will not be enough for two-thirds of builders to live off. Our members are being rejected for loans, and don’t have access to Government cash grants that would go a long way to saving them from being left high and dry.”
Berry concluded: “We are joining the call with other industry bodies for the chancellor to reconsider his decision not to cover dividend payments in his income support packages. This could be the lifeline that keeps many small businesses, employing thousands of people, afloat.”
Coronavirus Business Interruption Loan Scheme
The FMB has also called on the chancellor to address the blockages in the Coronavirus Business Interruption Loan Scheme (CBILS), as small builders across the country are struggling to keep their businesses afloat.
Half (50%) of FMB members who have applied for the CBILS have found the process either ‘somewhat’ or ‘very difficult’.
So far, 10% of FMB members who have applied for a loan have been rejected with the vast majority (84%) still waiting to hear back from their bank
Berry, said: “While we understand the immense pressure banks are under at the moment, the Coronavirus Business Interruption Loan Scheme needs to be fast-tracked and the criteria clarified as soon as possible to stop small construction firms going to the wall.
“There also seems to be some confusion as to who is covered by the scheme. SME housebuilders are crying out for financial support, but many are being turned away by lenders.
“The Government should work with Homes England and the devolved administrations to help find a way to keep SME housebuilders afloat in this time, ensuring that they are ready to resume building high-quality homes after the coronavirus outbreak.”