A hotel entrepreneur today slammed Boris Johnson’s business loans relief scheme after revealing he could not get Barclays bank to provide him with an emergency payment because he was unable to meet the terms of the scheme.
Mark Fuller, who owns popular celebrity haunt Karma Sanctum in Soho, said the arrangement requires borrowers to pay interest after six months and give a guarantee they will be able to pay the money back.
He said these terms meant the Prime Minister’s pledge to ‘look after’ businesses and keep staff employed were ‘not true’, because it was impossible to guarantee the loans would be repaid when it did not know how long his sites would be closed and losing money.
Mr Fuller said he had already been forced to lay off 90 of his 100 staff because he could not afford to keep paying their wages and shut a historic Notting Hill fish and chip shop that survived the Blitz because it would never be able to repay any loan.
Although the coronavirus business interruption scheme sees the government cover interest payments for the first six months, meaning initial repayments are cheaper, the borrower always remains liable for the debt at all times.
Mark Fuller, who owns popular celebrity haunt Karma Sanctum in Soho, has complained Boris Johnson’s loans scheme is not enough to keep is staff employed. He is pictured with Katie Price at his London hotel in 2014
The hotel owner with Lizzie Cundy (left) and Jessica Wright) at a fashion event at his London hotel in 2012
Mr Fuller told MailOnline: ‘Boris said “don’t worry, it’s all going to be ok” and that he’d make sure we can keep staff employed, so we all gave a big sigh of relief and I applied for my loan.
‘But then I see that you’ll have to pay interest after six months and they’ll only lend you money if it’s a viable businesses. I can’t give that guarantee when one of my venues has just opened and is currently loss-making and I don’t know how long everything will be shut.
‘The loan is under normal business conditions, which is fine but then don’t suggest otherwise. I have already been told by the government and Barclays that the only way to receive a loan is by cutting my staff. And the money isn’t not coming any time soon either so I still won’t have the money to cover their wages in the next few months.’
Mr Fuller owns Karma Sanctum Soho, which is popular with celebrities including Nick Knowles and Queen’s Roger Taylor, its sister hotel Karma Sanctum on The Green in Berkshire, and Geales fish restaurant in Notting Hill, which dates back to 1939.
He said he has been forced to close Geales and made the staff redundant because it would not be possible for the small restaurant to make enough money to repay any government-backed loan it receives.
Mr Fuller with his friend Nick Knowles in 2007 (left) and 2016 (right) at various London venues
He is seen with television personality Mark Wright during an event at the Sanctum Hotel Soho in 2014
The businessman says he has already been forced to lay off dozens of staff, including at the Sanctum Hotel Soho
The businessman added: ‘It’s never going to open again unless things change because there’s no possibility of recouping the losses.
‘The hospitality industry is very labour-intensive and paying for staff is our biggest expense.
‘A loan that is six month interest free but will get declined because you can’t guarantee you can pay it back isn’t a help.’
It comes as Chancellor Rishi Sunak is set to unveil another major coronavirus bailout package that could include underwriting £17,000 of every worker’s salary to stop millions being laid off.
There have been warnings that GDP could be slashed by a fifth and a million could lose their jobs within months – with many more to follow – after ‘social distancing’ measures brought the economy to a halt.
Geales Restaurant, a fish and chip shop dating to 1939, will close, Mr Fuller told MailOnline today
Karma Sanctum on The Green in Berkshire is new so currently loss-making, Mr Fuller explained
Mr Sunak is believed to be considering options including lowing income tax payments or National Insurance.
According to the Times, officials estimate that the package would effectively underwrite 60 per cent of the average wage – which is around £28,000.
The Treasury fears there are ‘significant technical challenges’ to the new approach, and had hoped to delay announcements until next week.
However, the government has been under enormous pressure from unions and MPs from across all parties to act faster.