Coronavirus: CAA under pressure to act quickly over loans scheme approval

Regulators are being asked to relax their financial liquidity rules if travel firms are going to be able to take advantage of the government’s coronavirus loan scheme.

Chris Photi, senior partner at specialist accountancy firm White Hart Associates, said time was running out for many travel companies as they face financial ruin.

He said the usual oversight by industry regulator the CAA when firms take on more debt must be speeded up or set aside before it’s too late.

Photi said he was due to speak to CAA bosses this week about the issue so firms will be able to benefit from the government’s coronavirus business disruption loan scheme.

“There is a regulatory gap between regulated companies being able to avail themselves of these loans and the reaction from the regulator to them actually structuring this debt.

“Under the Atol Standard Terms you have to get prior permission from the CAA for any new finance structure and any new security.

For instance, there are many businesses out there that have valuable freehold and long leasehold property.

“That’s a classic way of securing a position to get yourself some liquidity but technically you’ve got to go cap in hand and ask the CAA.

“The CAA historically takes a long time to make decisions when requested involving the external use of city lawyers. We don’t have time for all of that.

“The CAA needs to make some positive moves in this area and give the industry some indications about what is and is not acceptable and to make those decisions quickly on a case by case basis.

“But this loan scheme is potentially a lifesaver for so many travel businesses and after refund this is the second key thing that all travel businesses should be looking at.”

Will Waggott, former Thomas Cook, Tui and Airtours boss, added: “Time is the key here, businesses are going to go bust within the next couple of weeks and if it takes weeks and months it’s going to be too late.

“The CAA needs to relax the rules completely because effectively they are going to put businesses out of business unless we can get these loans through quickly.”

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