LEAR Fitness co-founders, Andrew Gillespie and Ray Huntzinger, have appealed to Rishi Sunak after being refused access to the Coronavirus Business Interruption Lending Scheme (CBILS) by Barclays Bank.

CBILS are loans to business, provided by banks, in which the Government offers to underwrite 80 per cent of its value.

However LEAR Fitness – which has two sites in North Yorkshire – was rejected despite positive recent trading performance, customer growth, and future plans to expand the business in 25 new locations by 2025.

Mr Gillespie and Mr Huntzinger – themselves both former Barclays executives – were given four different reasons by the bank for being rejected for a short-term loan.

Both men feel that their case highlights a “fundamental breakdown” in the way the concept of CBILS supporting SMEs through the crisis and the way it is being implemented on the ground and want Barclays to review the approach.

While LEAR Fitness, which is home to 18 full-time staff and 5,500 clients, is not in financial danger as a result of the Barclays rejection, its owners wanted to highlight the issue.

Mr Gillespie told The Yorkshire Post: “We normally have a great relationship with Barclays and having worked there myself for years, I know what a great supporter of SMEs they are. So

I’m completely baffled by how the bank is approaching the new Coronavirus lending scheme. LEAR Fitness should fit the requirements of the CIBLS scheme perfectly.

“We’ve tripled turnover in the past five years. We’re calling on the Chancellor to look at how the banks are implementing his scheme. He took a bold step by offering to underwrite 80 per cent of each loan and banks have been told to lend money to firms who would be viable but for the crisis.

“Our experience suggests banks are ignoring that request and we think the Chancellor should take action.”

Mr Gillespie and Mr Huntzinger were initially told the rejection was owing to the business not being in profit, common in new firms. On appeal they were then told by Barclays that it did not think they could repay the loan.

Following a direct appeal to the chief executive of Barclays they were then told it was due to the firm’s losses being more than half of the owners’ shared equity. Finally, after further correspondence Barclays cited an “undertaking in difficulty” response, referring to EU regulations.

LEAR has subsequently been accepted on a crowdfunding platform, Crowdcube, to raise £4m and has launched a ‘patron’ programme with clients which has raised around £50,000.

However, Mr Gillespie said: “The frustration for me is that nowhere along this process have we had clarity on the criteria that is being used. I have real issue with the fact that we could not get simplicity from Barclays.”

A Barclays spokesperson said: “We are confident that we are doing everything we can to get money to businesses as quickly as possible under the CBILS scheme.

“Unfortunately, this business does not meet the lending criteria set out by the scheme, but we have signposted them to other sources of support.”

LEAR Fitness has a strong focus on rehabilitation and ‘pre-habilitation’ health improvements services and has links with Macmillan Cancer Support who recommend LEAR Fitness to newly diagnosed cancer sufferers.

Around 1,500 of LEAR Fitness’ clients are classified as ‘vulnerable’, either suffering from cancer or diabetes, or being over 70 or pregnant.

Mr Gillespie believes that post Covid-19 the services LEAR provides will be in greater demand owing to increased need for the NHS for support during rehabilitation.

Fitness firm owners write to Chancellor after being denied crisis loan from Barclays