If you are an unemployed young – or not so young – person, fulfilling long term employment is hard to find at the moment. The chances are that the situation will get worse before it gets better. To help to change this situation, I am working with my graduate son to create a new company which will guide and support people to start their own businesses. Our ambition is to catalyse the creation of 1,000 new enterprises within 1,000 days. Big ambition but hey, dare to dream!
We approached a well known high street bank (where we are both existing customers) to open a bank account for our newly registered company. We don’t need a loan, credit card or budgetary support. At this stage we just want to open a dedicated business account to place some of our own funds in to cover the start up and running costs of the new business.
The very polite business manager at the bank helpfuly informed us that this was not possible. Due to the number of sham companies set up to claim a government bounce back loan – before quickly disappearing along with the £50,000 (apparently they all claimed the maximum £50,000 BBL but nobody noticed) – banks are no longer offering new accounts to new businesses. To open an account, it was explained, the new company needs to show a trading history – specifically to show a record of issued and paid invoices. But, we argued, the business can’t get it’s invoices paid unless it has an account to get paid into… yes, said the helpful manager, other people have said that!
So an unintended consequence of the generous BBL scheme offered by the UK government is that the banks have firmly closed and locked the stable door after the rogue horses have bolted. Net result – honest new entrepreneurs cannot begin trading. Our target of 1,000 new businesses is beginning to look even more challenging.