An entrepreneur says many firms are at risk of going out of business within days, despite support measures taken by the Government during the coronavirus outbreak.

Eddie Black, managing director of ECO Holdings, which has bases in Carlisle, Mealsgate, Creca and Dumfries, said the time taken to access the Coronavirus Business Interruption Loan Scheme outlined by Chancellor Rishi Sunak last week would be too long for many businesses.

The loans are being delivered by the British Business Bank through over 40 partners, including high street banks and other lenders.

Eddie says at present the awarding of the loans, which are facilitated via the Enterprise Finance Guarantee Scheme, will be subject to a four to six week due diligence and credit check process.

“People won’t last four to six days, never mind that,” he said.

The Government is guaranteeing 80 per cent of the value of the loans for banks.

However, Eddie said banks could still be put off awarding the loans by the risk of people defaulting - especially as contracts were cancelled and work dried up across a wide range of sectors.

“If there are defaults it will be down to the banks to pursue the debtor and take assets,” he said.

“The EFG scheme is not a favoured route for them because the British Business Bank will have the excuse that any inability to pay was down to the lender’s poor due diligence.”

To be eligible for one of the loans, businesses must be based in the UK with an annual turnover of no more than £45m.

The British Business Bank’s website says they must also have “ a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty”.

However, Eddie said this was contradictory.

He said: “The British Business Bank criteria states that a company needs to be viable now. Businesses have had all future, or current, opportunities or contracts suspended, and/or, in worst case scenarios, cancelled, without knowing what comes next.

“Businesses don’t know if that opportunity or contract will be there in the future. Will the client even exist?

“The serviceability and criteria elements are a complete contradiction in terms. No-one knows what the future holds. In many ways, it’s the survival of the fittest.

“There is a risk that businesses will default - that is why it has been described as a war chest.”

Eddie believes the Government needs to provide a 100 per cent backing for the loans.

“The best of British businesses will topple like dominoes if the government don’t protect the banks,” he said.

“If the chancellor really wants to back British business he needs to back the banks and put the liability on them to ensure that it gets this help into the economy.”

He said any businesses that did not follow the rules could be “pursued at a later date”.

“The help is needed now,” he said.

“The money has been pledged and, even if there is a risk of some of it going down the drain, it is better than not getting it into the economy at all.

“We have to take a win-at-all-costs attitude to ensure British businesses survive.

“This is no time for unworkable criteria and red tape - the Government needs to realise this now before it’s too late.”

The ECO Group of companies includes Ghyll House upholstery and design, in Mealsgate, as well as telecommunications arm ECO Communications and other divisions offering a dry ice cleaning service and workplace design.

Eddie said part of its work involved a contract with Leeds Teaching Hospitals NHS Trust, to which it recently delivered a consignment of specially-treated antibacterial furniture.

He said, if necessary, the company was ready to lend both its expertise in cleaning and workplace design to the NHS in the fight against coronavirus.

This could involve taking part in efforts to re-purpose buildings such as hotels to be used as hospitals.

“We are saying to the NHS if you need our help then you can get it,” he said.