Large UK tech firms say government is not providing them with coronavirus support
Image credit: reuters
UK tech firms including Deliveroo, Citymapper and Bulb have called on the government to give them access to financial support that is currently only available to smaller firms in the wake of the coronavirus pandemic.
While Chancellor Rishi Sunak (pictured) announced support packages for firms last month under the Coronavirus Business Interruption Scheme, some businesses are excluded because their revenues are too high to be covered.
The loans are paid by regular high-street lenders, but backed by the Treasury and the scheme allows businesses impacted by the virus to apply for up to £5m in loans.
However, despite many of the larger tech firms being valued above $1bn, they are also loss making and therefore not deemed as “viable” by banks.
Bigger firms are meant to be able to access the Bank of England’s Covid Corporate Financing Facility. However, businesses need to have an investment grade credit rating to access this, a time-consuming process that many newer companies have not yet gone through.
In a letter written to the Chancellor, 12 firms – Babylon, BenevolentAI, Blockchain, Darktrace, Faculty, Five AI, GoCardless, Graphcore, Improbable and the three mentioned above – called for additional support measures.
“As innovative companies we build technology and systems that transform sectors. For customers, we drive costs down, standards up and for society we create whole new categories of products and services. We are vital to productivity, clean growth and UK exports,” the letter read.
“We are concerned that unless urgent changes are made to the current schemes, then the high-growth UK tech sector will be put at risk.
“We are therefore writing to ask you to urgently set up a taskforce meeting of leading tech businesses to work with you and your officials to find a way for high-growth tech companies to be able to access the lending schemes you have already established or new schemes if necessary,” they said.
A spokesperson for the government said: “We’re taking unprecedented action at speed to support businesses, jobs and our economy.
“This includes £330bn in business loans and guarantees, paying 80 per cent of furloughed workers’ wages, tax deferrals, and introducing cash grants of up to £25,000 for small companies and covering the cost of statutory sick pay.
“The tech sector is a central pillar of the UK economy, and we recognise there are significant cash-flow challenges for high-growth and early-stage technology companies.
“We are working urgently in government and with the venture capital finance sector to assess these issues and consider how to best support them.”
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