GoFarFast Show

The future of banking and fair finance with Kevin Hollinrake MP

October 09, 2020 Farillio Season 1 Episode 4
GoFarFast Show
The future of banking and fair finance with Kevin Hollinrake MP
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GoFarFast Show
The future of banking and fair finance with Kevin Hollinrake MP
Oct 09, 2020 Season 1 Episode 4
Farillio

 In this episode, hear from Kevin Hollinrake, MP, and chair of the All-party parliamentary group on fair business banking, talk about the future of banking for small businesses, the government schemes and loans available to small business during COVID-19 and what is being done to try to achieve fair finance for the all important SME community. 

Show Notes Transcript

 In this episode, hear from Kevin Hollinrake, MP, and chair of the All-party parliamentary group on fair business banking, talk about the future of banking for small businesses, the government schemes and loans available to small business during COVID-19 and what is being done to try to achieve fair finance for the all important SME community. 

Merlie: Good morning and welcome to today's #GoFarFast Show! The small business talk show that gives you, our community, the answers to the burning questions of today. I'm Merlie, and I'm here once more with my trusty co-host, Aaron. How are you doing, buddy?

Aaron: Really well thank you, Merlie, and I can't wait for this show, it's going to be a cracker!

Merlie: Exactly! As always, a massive thank you to the National Enterprise Network for sponsoring the show and making it possible. Aaron's right, we have a cracking topic to discuss today, with probably the best person to interview on this subject. Aaron, can you tell us a bit more?

Aaron: Certainly, Merlie. So today we have the pleasure of hosting the one and only Kevin Hollinrake, who is a Conservative MP and a Member of Parliament since 2015. He's a member of the All-Party Parliamentary Group and is especially involved in fair business banking which, during this past year, has been a hot topic.

One of the key topics that we want to cover today and dive a little bit deeper in to is the future of banking and fair finance. How business can thrive. I'm sure you will all agree that we can't wait to find out more. Let's not leave the audience waiting any longer and get our expert guest on the line asap.

Kevin, welcome to the #GoFarFast Show. We've got a few questions that we want to go through. Our first big question is:

You are an MP and Chair of the All-Party Parliamentary Group on Fair Business Banking (APPG), whose main purpose is to put forward policy recommendation to the government. The group encourages a finance system that allows enterprises to flourish and business to thrive. Can you tell us a little bit more about the role of an MP and the aims of the APPG? How has the APPG been helping business, especially small business, to flourish? I guess a big question wrapped up in all of this is, how can the government listen to small businesses?

Kevin: Thanks for inviting me on. Just to step back from 2015, for 20 years prior to that I've been in business, so I'm delighted to talk to you and your audience because business has been my life, it's my passion. I believe that business, and I'm not talking about huge businesses I'm talking about SMEs, they are the lifeblood of the country and they make the economy dynamic. They drive down prices and drive up service so they are vital for our economy, but I think we often pay lip service to business.

I moved from business into politics and a lot of people ask why I would do that. I built a business from a small business to a national business over 20 years. I'm still chairman now but I wanted, like most business people, room for change and room for legacy, as well as trying to build something for ourselves. This is a nice legacy to have, someone thinking you've changed things at a fundamental level.

As an MP, most of the time you are lobby fodder. You are there to walk through the lobbies at the right time when the Whips tell you. A lot of people tell you that when you go into politics you can't change anything and then what's the point? If you've had a successful business career, what's the point? I don't believe that. Actually, I've been surprised. I knew it would be difficult to get change, and it is, but it's easier than I thought.

MPs are all about trying to drive change and the key things to do are very similar to the principles of business. You're trying to build a compelling case for something, a compelling problem, a compelling solution. You've got to build a coalition of people around that particular solution and then you've just got to be constant. You've got to constantly bang on about whatever you're talking about. So, it's really about driving change, it's really about the fundamental conditions for business. You want a level playing field, so a lot of what we do is trying to create a fair and level playing field between businesses and banks.

We know that it's a very inequitable relationship because they're so powerful in the UK. When things go wrong, businesses can get very very badly caught up in the crossfire. We try to make sure that the business environment, for finance particularly which is probably the most critical thing for business, is a fair one and that businesses can get access to finance as they start up and scale up.

Merlie: It's a huge job, Kevin, and I always think it's fascinating because banks really are like the barometers for when something's going right and when something's going wrong. I think you sit right at the core of that knowledge with the role that you play, both as an MP because you can see what's happening in the community, but also in relation to the All-Party Parliamentary Group as well.

Kevin, you're prolific in the way that you communicate knowledge and information, which I think is fantastic, I wish we had more of that from people representing us in government. You have a report called Fair Business Banking For All, which was published with The Centre For Policy Studies not too long ago, and you make a big point of highlighting the importance of small businesses for the UK economy. Just to remind everybody, small businesses make up 99.9 % of businesses within the UK, that's whopping. Last year we contributed £2.2 trillion to the UK economy. We might be small but, as we always like to say at Farillio and Boffix, small is mighty.

Kevin, this year's economic contributions from small businesses are unlikely to hit those hallowed levels of last year and lots of high-performing, well-run businesses have actually been crippled by current events. Staying open and keeping cash flows above the red line continues to be a massive challenge, even for the very best of our UK small businesses. So how do you think the banking sector can really help our small businesses to stay mighty and to power through Covid? What more needs to be done, as the Chancellor is very clear that it can't just be about loans?

Kevin: That's true, but equally he's used most of his buyer power in terms of grants, job retention scheme and business rates grants. I think we've treated 168 billion businesses so far in those areas. That's 300 billion in total because obviously tax receipts are way down so there's not much left in the locker, to be honest.

I think most businesses are going to have to restructure their businesses to try and cope with the future, and this may well be with us for six to twelve months. I think, as Rishi said the other day on the floor of the House, we're going to have to live without fear but live with the virus. I think most people should be expecting that this current local lockdown is going to be with us for 12 months, and think about how we get through this and cut our cloth accordingly.

Two big things that banks need to do is to get money out of the door quickly in terms of loans. The processes have got to be good, they've got to be fair, and they've got to make sure that their administration processes are good. Generally, Bounceback Loans and Coronavirus Business Interruption Loans, which many of your members will have accessed, have been delivered pretty well and pretty quickly. It's a good scheme by the government.

We've had a lot of input on the Bounceback Loans. They were an afterthought, really. We needed them initially, not later on in the pandemic. Initially, we were told there's no demand for those loans, now it's 1.3 million later. A lot of businesses have access to those loans, so they need to continue and they've already been extended to the end of November. We think this needs to be extended through the whole of 2020 and maybe into 2021, maybe in a slightly different form. We need to continue access to finance because lots of businesses who have not yet accessed those schemes will hit cash flow difficulties.

The other thing is to make sure we do things differently than in post-2008, when the banks came in and just took apart SMEs as they tried to restructure their own balance sheets. They actually put a lot of businesses to the sword in the process. It was really unfair, with poor communication and no proper chance to get themselves back on their feet or find alternatives.

We need a proper code of conduct if businesses hit cash flow difficulties. They need to restructure the loan payments so they can pay over a longer period or have payment holidays. We need a standard process for that and we're pushing the Treasury on this. They are working on that, so we know that banks will follow the process. As I'm sure your members know, business finance is not regulated. Over £25k it's not regulated, so when banks decide to pull finance it can be done with a sweep of a pen - almost instantly. There's no requirement even to try to treat a customer fairly during that process or to be reasonable during that process.

We need banks to treat people fairly and reasonably. We've got an expansion of the Financial Ombudsman Service that will look after businesses. It used to be only £1.8m turnover, now it's £6.5m turnover and above that, up to £10m, there's a new service called the Business Bank Resolution Service. We've been big advocates for those reforms and I'm delighted to see that those reforms have been brought forward. It means that businesses up to £10m turnover will have access to an independent resolution body that does judge the bank's actions on a fair and reasonable basis, so it is kind of regulated now. That's the good news, so there are more protections for businesses through what will be a very difficult time.

Merlie: I think that's brilliant, absolutely brilliant, don't you Aaron?

Aaron: Yes and I'd like to really emphasise what you're saying there about how crucial the Bounceback Loans have been. We've seen so many examples in the communities we're involved in where the loans have kept those businesses alive. At this time they're crucial and, as you've pointed out, it's not just about just giving out grants. The loans themselves have been lifeblood.

It's really important what you're saying about the fact that there is going to be some regulation and that there is some regulation now. I think we've shown and we've demonstrated that it is down to the businesses themselves to be mindful of what they're taking on and the risks, but they need that bank support to go with it. I don't think most businesses out there will just go out and get some credit willy-nilly. They've normally got a reason for it and they usually have taken professional advice. Having that regulatory body there so they can hopefully achieve what they need to achieve and keep their business going is so important.

On a similar point, I don't think the UK is alone in all this. I think there might be, or there must be, lessons to be learned from abroad. Are there any other countries handling fair business banking and the crisis that small businesses must also be facing abroad? Is there anything we can learn from them? Anything we can take on board?

Kevin: Totally. I hate to say it, but when things go wrong here we're always pointing at Germany and how well they're doing. How they're doing things and testing things, and business finance is the same. The UK is really unique in its concentration of market share with the big four banks. 80% of SMEs finance with the big four banks and what we saw between 2008 and 2013 was a 25% reduction in the availability of finance. In fact, the net lending to SMEs from the big banks saw a 25% reduction.

In Germany, their banking sector is mainly mutual banks. There are 1500 regional mutual banks which are not for profit and not affected by shareholders' interests, which is why we saw the contraction in lending from our banks post-2008. During that five-year period in Germany, they saw a 35% increase in lending to SMEs because they needed it. It's at those times you need it. It's the old umbrella gag, the bank gives you the umbrella when it's sunny and then takes it away when it's raining. It's the opposite of what we need.

What we need desperately is a banking sector that's not just dependent on the big four banks. Regional mutual banks are massive in the USA, massive in Japan, massive in Canada, massive in Germany. All the other economies have them. We used to have them and we invented them. We invented them and then we got rid of them all, crazy! We need a completely different system that has a much more benevolent approach, a much more patient approach to businesses when things get tough.

It's too late to do that for this crisis, so the government's had to step in with the support of the Bounceback Loans and CBIL loans, and these other forbearance measures to put a sticking plaster over it. Once this crisis is over, and what we really should be working on now, is to set up a proper mutual banking sector on a regional basis that can deliver great support for SMEs. I know what it's like as an SME when you're always looking over your shoulder thinking is the bank going to foreclose on me if I don't make my numbers this month or this quarter? That's the last thing you want in business. You should have a confident, good long-term relationship with your bank and that's one of the solutions.

Merlie: I couldn't agree more. I think it's interesting, isn't it Aaron, that in these times so many more of us, especially in the new business community, have a more and more remote relationship with our banks. I know there are a couple of questions from the community specifically on the relevance of banks to businesses these days and the relationship, so I'll park that question for now, but I think it's really interesting.

Coming back to what you were saying a moment ago - I know from the website for the All-Party Parliamentary Group that you talk about levelling the playing field between businesses and lenders. Can you tell us a little bit more about that, because that's fascinating? How do you level this playing field? How do we get closer to a Germany style model for example?

Kevin: It's really not easy. It's simple, but it's not easy. The two things are completely different things of course, simple and easy. I think the sticking plaster is the work we've done in terms of dispute resolution, so at least you've got rid of this nonsense effectively. If you go to court with a bank, the judge will make a judgement on the basis on whatever is written in the agreement you signed. In the agreement that you signed you probably didn't read all the small print, but it probably says something like even if the bank is guilty of malpractice, or of egregious behaviour, it cannot be found guilty of that in the court. I mean they literally exclude themselves from any wrongdoing in the contract.

If you try to sue a bank, there's no fair and reasonable test in that contract you've signed. They can pull the finance at any point and you're going to lose in court. That's pretty much the case, so we needed an alternative resolution. That's why we've got Financial Ombudsman Service and the Business Bank Resolution Service. This gives business somewhere to go when things go wrong but, more importantly, we stop the banks doing the wrong thing in the first place. This time we are watching, this time we'll have a code of conduct, this time we'll have a process that will judge whether banks follow that code of conduct or not. So the chance of people getting taken apart by the banks is much lower.

Merlie: Is this live right now? Is this happening today?

Kevin: Yes. So the Financial Ombudsman hears cases for up to £6.2m turnover - it used to be £1.8m. The Business Bank Resolution Service is going to through a live pilot. I've been on the steering group for the best part of two years and it opens for cases in the middle of November. Most businesses will be able to go somewhere if they have up to £10m turnover.

In terms of mutual banks, we need the government to step in and to a slightly different regulatory regime for these mutual banks. They don't have the same systemic risk as the big banks, therefore the regulatory burden should be slightly lower. We need some capital. We need to pump those banks with some money so that they can set up and start lending to SMEs and they will produce a return.

It's not risky because they're lending to sensible businesses. They've got a sensible business plan and demonstrably good returns. Banks that operate on this basis like Handlesbanken, are not mutual, but they operate on a very sensible lending approach, not the rollercoaster ride the banks have followed in the past. They are very popular and it's something we should be investing in. We should use taxpayers money to fund, prime it, and it'll come back in dividends.

Aaron: I think that's really powerful, especially about businesses being in fear of what could happen if they don't keep up with reports, making the KPIs and all that sort of thing. It really can stifle the business and make them live in fear. The idea that if we can get that lending to the small businesses on the right terms and make sure there's a good business plan, that's really powerful. That's going to encourage them. It's going to give them that sensibility that they've got the backing of the banks, and they've got the ability to go out there and push forward. That's what the economy needs, doesn't it?

Kevin: We said before, it has all gone remote. When I was a kid growing up, we knew our local bank manager and he was part of the community. He knew my dad, knew he was a good risk, knew he would always pay the money back. Nowadays it's a credit committee. I've been in front of a credit committee in 2008 with our business and it was traumatising. They listen to your story, and I remember one day I went to see the credit committee and we explained what we'd done and all of the actions we'd taken. I think we'd just made 135 people redundant over a six month period, which cost a fortune. We explained everything we had done and, at the end of the conversation, he said: "right I am putting your interest rate up from 2% of the base to 3% of the LIBOR" - which cost us £6k a month. I was saying I've just made two people redundant today, people that I had worked with for best part of ten years in our business. They've got to go back and tell their family that they've lost their job and what you're effectively saying is that savings I made trying to save my business, I'm giving that to you. How is that going to help my business right now? This is the attitude, the patient capital doesn't exist, the banks look too much towards their shareholders and not enough to their customers.

Merlie: I think that's so true. It's quite scary just how remote banks feel, just how unfeeling that relationship often feels and how much times have changed as you say, Kevin. It's extraordinary.

Aaron, I know you had a question on this fair business banking mark to put to Kevin before we turn to our viewers' questions. We can see them banking up, I think it's really worth discussing that too.

Aaron: It's still about confidence isn't it and we need to get confidence into small businesses. We saw on the fair banking website that there is something called a fair banking mark that the banks can voluntarily sign up to. Can you tell us a little bit more about this mark? Which banks have it? How effective is the mark in ensuring fairness and confidence with the small businesses?

Kevin: It's a great idea and a great concept. It's not one of our initiatives, but it's a great concept. It's mainly aimed at the personal banking side rather than the business banking side, but we absolutely need something for the business banking side like that. Most people in business think you've got do the right thing because that's the way you attract more customers and the way you keep customers.

Reputation doesn't seem to affect big banks' market share or profitability at all. RBS, for example, is one of the UK's largest banks and has the worst reputation in terms of customer service - it doesn't seem to affect their numbers at all. The normal dynamics of business that drives up customer service and drives down prices doesn't seem to work in the banking sector. We've had to put some other measures in place and we do ultimately need to break the big banks up so there are more competitive markets and people can shop around more. I think that fair banking mark in the business banking world would be a great initiative for banks to adopt. It's maybe something we should push harder with them.

Merlie: I agree, I think anything that holds organisations to account, that accredits them, audits their behaviour and their customer service has to be a good thing. We're going to turn to the questions from the community now and there is a fantastic set of them, so Kevin I hope you're ready! I'm going to dive straight in.

The first question is - I didn't get the business loan I wanted a few months ago and things have been really difficult. This is a situation that so many businesses are facing right now. I was honest in my application but I don't feel others were as honest. I know you're all about banking fairness, this doesn't feel very fair.

Kevin: I don't know the circumstances of the case but if you get your constituent to drop us a line: kevin.hollinrake.mp (at) parliament.uk, we can pick up sister cases and take them back to the banks concerned. Sometimes the banks have just made an administrative error. Sometimes the reason behind it could be some credit issue. Bounceback Loans, for example, there's no requirement for banks to assess creditworthiness, but some of them do assess credit risk from a credit check so it depends on their process. I'm not saying that's the case here, but we've got probably a 50-50 chance of getting things resolved if people drop us a line.

I've got to say generally Bounceback Loans have been a huge success. For most people, the banks have moved really quickly. There were some wrinkles in the system but they've ironed them out and most people are getting access to these loans, but very happy to help any members of your community that are having problems.

Aaron: That's really really useful and I'll just emphasise the fact that, from our community and what we've seen, Bounceback Loans have been a huge success. They have been readily available so kudos really. It was essential for many of our businesses and many of our people in our community, so we really appreciate it. I think as you said, there is sometimes a case of a few administration glitches here and there that's causing these problems. Having that ability to speak to someone like yourself is really helpful to businesses.

When we're talking about small businesses, one of the biggest decisions they've got to make is about their bank. We've got a great question here: As someone who is starting out in business, do you have any thoughts on the best bank solution for me? I'm a bit nervous about the newer banks or challenger banks as they're widely termed. Are they safe is a big question and something that a lot of our clients have been asking us lately. Older banks can be quite slow and old-fashioned. Do you think banks are even relevant anymore? With so much finance taking place online I'm wondering what other options I might have?

I think we have this quite a lot and, as accountants, we're constantly asked which banks do you recommend. We're obviously not allowed to advise which banks. We can push them in the right directions and it's so much more convenient to push them towards the challenger banks because we know clients can get that interaction straight away and they can get that decision much quicker. They can get up and running quicker. How do you feel about them at the moment and what's your advice to small businesses on that?

Kevin: Well there's massive and ever-increasing competition in the marketplace as I said earlier. We really like challenger banks. I have a Revolut card and I love that kind of stuff, I know it's not for business, although they're moving into the business space. People like Tide, The Funding Circle, and people like Starling of course. It's really exciting stuff that they have. It's not just about banking, it's being integrated with your accounts and all this kind of stuff. They're really about productivity tools, which is great for me, the less you have to engage with your bank and the more seamless it is, the better.

So, really a word of caution, which is very frustrating. We've encouraged people over the last five to ten years since the crisis to try and diversify and move to different banks. The new banks have started up on the back of that, these non-bank lenders as I said. But the Bounceback Loans have mainly been distributed through the big banks. We've been banging on about this with the Treasury and we've got this compelling case and coalition of people around it including media, MP and ministers. We're constantly banging on about getting funding to Tide, The Funding Circle and Starling so they can lend money to their customers. So you've got about 250,000 businesses with new challenger banks that can't currently get easy access to Bunceback Loans. So that's the only word of caution. I think we will solve that problem. There are a couple of ways to solve that we've proposed to the Treasury and we'll keep banging on about it. We haven't solved it yet, but we will get there.

Aside from that, I think I would definitely consider one of those new challenger banks. Shop around, it's wherever you feel is most suited to your business and most suited to your business model. That's what we believe in isn't it? You know, we as business people, we believe in competition. We want the fair and level playing field. Keep the government out of the way. Let's get on with it, and it's the same with banks where you want people to have a choice and it should be a competitive market to provide that choice.

Merlie: That's great, and there are tools of course that can help you compare banks and compare the offerings. You don't have to do it in a vacuum or go around as we would have done 10 or 20 years ago when we were choosing the right bank. These days it is online, you can get comparisons, read reviews and find out an awful lot more about the bank.

I'm going straight into the next question Kevin, if I may? On the All-Party Parliamentary Group website, it says that the APPG acts as a forum and focal point for the SME communities in the small business community. I am part of that community and I would love to know more about how the group aims to help us to get a fair deal. How can I get involved? Can I get involved and have my say?

Kevin: We are delighted to be engaged with you in any way possible. I guess the number-one thing we've been preoccupied with in terms of the work we've done has been a legacy dispute since 2008. Frighteningly, 12 years later, we're still banging on about people who were disadvantaged and businesses that were stripped as a consequence of the fallout of the last recession. So a lot of our work has been on the dispute resolution side. We've had a good deal of success there, particularly for the people who were banking with Lloyds and RBS.

As well as that, we have webinars on a monthly basis - we've got one coming up and we'd be delighted if you'd join us. We usually get 100 people on there including MPs and all kinds of people. It's about coping with Covid and business plans to cope with Covid. What's the next iteration of the Bounceback loans? What's the next iteration of Coronavirus Business Interruption Loans? What about things like forbearance if things go wrong?

We get good people on there. We've got people like the President of CBI, a lot of Villa Maura. We get John Glenn, the businessman. We get the economic section of the Treasury, we'll get the regulator on there, we get Adam Marshall from the Chambers of Commerce on there, so we have a good range of speakers to talk on different aspects.

We've got a programme called Bankers For Net Zero, which you can Google. It's all about how we help businesses to transition to the new world of net-zero rather than simply leaving businesses behind. Let's say you're producing handmade bricks at the moment and use a lot of gas to do that. Is the bank suddenly going to say I'm sorry I'm not going to support businesses like yours anymore as they might be using too much fossil fuel? How are we going to help them transition to biofuels and that kind of stuff? That's what we need banks to do, so a lot of programs and projects. Please go on the website, drop us a line and we'll be delighted to engage in any way we can. SMEs are the hearts of everything we do.

Aaron: That's brilliant news. You've said it really well there, about the fact that SMEs are at the heart of everything that that you want to do. I think you have harped on about it before, about how banks have changed massively in the last five to ten years from that local community feel to more national decisions and everything that goes with it. People need that ability to have that conversation and drive the way that things are changing and the way it is. Having all those options that you mentioned is really powerful, I think that's going to be quite useful to small businesses out there.

We've got a really good question here. I think some of it you've already covered, but it might be worth just emphasising for this particular member of our community. It says - the terms that banks want from small businesses they give loans to are really unfair. Again, we don't have the details to go with it but just as a generalisation. Four months ago, I had to take out a loan with non-covid terms as my local bank wouldn't give me the Business Interruption Loan or Bounceback Loan. They were so rude about my business that it put me off applying to anyone else. It's been so stressful, can you do something to make banks listen to small businesses and to be more realistic about our circumstances?

Kevin: Yes we can. I mean, you're right. If you remember the original terms of the Coronavirus Business Interruption Loan, that was the only scheme that was rolled out. Remember when it first came out, basically what it said is, you can have one of these loans if the bank won't consider you for a normal loan. So these loans are really good, they're really cheap interest, there's no personal guarantee or silly house guarantee. They're better in all these ways, but you can only have one if the bank won't lend you on normal terms. So I would then go to a bank and they say, you can't have one of those nice shiny cheap loans, I want to give you my own really expensive loan with lots of different conditions you're not going to like.

We obviously immediately raised these issues with the Treasury on the floor of the House saying this just isn't working. This is a nightmare and it really was a nightmare for three or four weeks. We had lots of problems, and then they effectively scrapped that rule. They made the Business Interruption Loan much more cost-effective and said to the banks give them these loans first. So it sounds like one of your members has been given one of the old loans, which is really unfair. We also banged on about how we were told there was no demand for the smaller loans and Bounceback loans. Anyway, we got that brought forward and we brought forward the Bounceback Loans. Not just us, other people were involved as well - so Treasury will act and banks do act if we make enough fuss about it. You've got to make a lot of fuss. We use the media, we use MPs, we use ministers and we use the banks themselves. We correspond with them, we work with them a lot and then we do get the change that we'd like to see.

I think in terms of treating businesses better, which I think is part of the question, I think that goes back to the dispute resolution mechanisms. The Financial Ombudsman Service and the Business Bank Resolution Service means that banks will have to communicate with you properly, will have to treat you properly when things that go wrong. They can't just simply stick you into insolvency if they want the money back. All those kind of things will reduce against this code of conduct. So it means there's a deterrent. For the first time, there's an imperative other than the court, and most businesses are not going to access the court over the bank. For the first time, it is really imperative for banks to treat people well in the first place. So, hopefully, people will see more constructive behaviour from the banks in these situations.

Merlie: So you heard it from straight from Kevin's mouth, guys. You need to make a lot of noise and a lot of fuss. This is the man to do it for you, so get on that website, get writing to Kevin if you need change to happen, because he is clearly the man to make the banks and the government listen. That is actually a very reassuring response, Kevin. Thank you.

The next question I have is from a business owner who has a spa and beauty treatment business, which has been very badly hit due to Covid19. They say: we were closed for almost four months, had to spend a lot of money on changing how we do things so we could reopen, and now it looks like we're going to face even more hardship. We were doing really well last year, we had 30% growth and we were about to open a fourth location. Now I'm facing shutting down all but one site and letting loads of people go. What advice do you have for businesses struggling with funds right now? I wanted to take a loan but I'm terrified of the repayment terms. Are the loans the best place to start, or can you suggest alternatives?

I mean that's a big question from somebody who clearly needs some really good advice. In an ideal world they would be going to their bank manager for this advice, wouldn't they?

Kevin: Yes they would and it's great that you've got this kind of network where people can seek advice from someone other than their bank manager. This is the third recession I've been through in business and it's definitely been the most catastrophic and scary. But also, I've never seen any government support like this ever before - which is the good news. Having said that, this support is likely to come to an end. The new job support scheme is being brought forward. That will help keep some people on, by paying a share of the hours if you're better off working part time rather than working full time

The first thing I would do is try to cut my coat according to my cloth. You've got to really try to hunker down wherever you can to cut costs. Look at other revenue opportunities so you don't stop the innovation. Businesses are brilliant at innovation and making things work against all the odds. You've got to continue to do that, you've got to be creative, you've got to keep thinking. Yes absolutely, there is an issue with some sectors particularly if they've been asked or forced to close, in particular the night-time economy. Spa & beauty perhaps might also suffer some from greater restrictions. It may be that the Chancellor comes back with some more sector-specific schemes, but that's pretty tough to do. The trouble is that dividing one section from another is very difficult, so I wouldn't expect that. I would simply try and cut my coat.

In terms of 'should I get a loan?' The Bounceback Loan schemes are very cheap so you can take the biggest loan available because there's no interest to pay for the first 12 months. If you're in two minds about it, go and get one because you can pay it back within 12 months without penalty and no fees whatsoever. After that is 2.5% and you can pay back over ten years. Even if you pay it back in two years you still pay very little interest, so it really is a very affordable way to borrow. The government guarantee is behind it and there will be this code of conduct. Yes, it's the last resort getting a loan if you don't like getting into debt, but I would get one just as a bit of cover because you can pay it back without penalty.

Merlie: That's great advice Kevin, thank you. To anyone struggling out there, do get some advice on your options and do look into the circumstances. Please don't struggle alone. If there is a lifeline and you're worried about it, go and find out more to hopefully alleviate that worry. I know you guys are all doing this anyway, but do whatever it takes to keep your businesses alive. Times will get better, we have to get through this period though and, you know, with a bit of luck the Bounceback Loan is something that will work for our business.

Guys, I think we've got time for one more question. The producers might shoot me for saying this, but Aaron do you want to ask the next one? It is a great question. I really want you guys to hear the answer to this question.

Aaron: Certainly, Merlie, and I want to emphasise everything you've just said there about making sure people get the right advice.

Here is a question, and it may be related to more of their personal side of things, but it's worthwhile just bringing it up anyway: My bank charged me for lots of things, like insurance, that I didn't need. I've since discovered this was unlawful and I could have a claim against them. I keep getting calls from a business that says that they get my money back, but I don't know if it's a scam or not. Do you know how this works, and if it's true that what my bank did was against the law?

Kevin: The banks have been found guilty of a succession of scandals, so it's not beyond the bounds of possibility. PPI is an obvious one, but also LIBOR rigging, foreign exchange, SME asset stripping, so it's more than possible. What you should do is go to the Financial Ombudsman Service. Don't go to a claims management company just go to the Financial Ombudsman Service - it's totally free.

They will look at your case and they should be able to advise you if the bank has done something wrong or not. It won't cost you a penny and it won't cause a problem with your bank either because the banks pay for the service. It's a good service and it's free for you. That's if your business has got a turnover of up to £6.5m. If it's up to £10m, then you go to the Business Bank Resolution Service.

Merlie: I think that's a really important piece of advice as well, guys. I think there's a lot of people anxious about what may be happening but are terrified, Kevin, of some kind of retaliation from their bank. Maybe some heavy-handed treatment or the bank says no to a loan application if they are asked questions about behaviours being appropriate or lawful. So it's great to know that the Financial Ombudsman Service is there and that users, consumers, and customers can look at that and it won't cost them anything. If you are in the same position as this particular viewer, then please go and check out the Financial Ombudsman Service's website.

Thank you so much, Kevin, for being on the show and for subjecting yourself to all of these cracking questions.

Kevin: Great questions. It's been a pleasure to do it and you can invite me back at any time. I'd be delighted to help in any way I can.

Merlie: Wonderful. Aaron, it's been a brilliant show, hasn't it? Some great questions. I'm very sorry we've run out of time and we can't ask any more, but do keep them coming in. You've heard it from Kevin that he's happy to come back and be interrogated again.

Don't forget to like, comment and subscribe. That's what keeps us going. Keep sending the questions in. I've really enjoyed today, Kevin, thank you so much for sharing so much information with us, it's been amazing hasn't it Aaron?

Aaron: It's been brilliant, thank you again, Kevin. It's been fantastic, thank you.

Kevin: My absolute pleasure, thank you very much.

Merlie: All right, guys, that's all for today's show, but just remember we're still here. We'll be back with more episodes, and more incredible guests like Kevin for you very shortly. In the meantime, a massive thanks to Kevin again, Huge thanks as always to Aaron and the National Enterprise Network for sponsoring the show. Take care, guys. #GoFarFast