Thousands of Gloucestershire businesses may fail without further government help if the coronavirus lockdown drags on.

That is the stark warning from the Confederation of British Industry and comes on the back of a report which suggests only around one in six businesses in the South West believe they in a position to survive if the crisis lasts for six months.

And Punchline has heard from businesses across Gloucestershire who are considering job cuts if further help is not made available.

CBI director general Carolyn Fairbairn said firms could be forced out of existence without further help from the Coronavirus Business Interruption Loan Scheme (CBILS) and new grants for small companies.

She followed Mike Cherry, chairman of the Federation of Small Businesses, in calling for loans under the scheme to be guaranteed 100 per cent by the Government instead of the existing 80 per cent.

And she called for the creation of a fresh scheme for small companies which need to borrow less than £25,000 with the same 100 per cent backing from the Government.

Chancellor Rishi Sunak is believed to be considering taking that step with an announcement expected next week, although Bank of England governor Andrew Bailey has questioned whether the existing scheme is already "too complicated".

Local shops and pubs employing no more than 10 workers are likely to be covered by the scheme with analysts suggesting one million companies could benefit.

Mr Cherry said: "It's good to hear that the Treasury is set to embrace our recommendation to provide 100 per cent guarantees on loans with values up to £25,000.

"Doing so will help to get far more cash to far more of the firms that need it - businesses that have had to pay March's payroll and ongoing overheads with no revenue coming in.

"The average value of a CBILS loan stands at more than £170,000. The vast majority of small firms - more than 95 per cent of which are micro businesses or sole traders - are not seeking loans of anywhere near that size."

He continued: "This is only one piece of the puzzle. A lot of banks need to make back office adjustments to ensure they can issue commercial loans of this size, as they are often subject to the terms of the Consumer Credit Act.

"They must do so swiftly if this change to the CBILS terms is to have a meaningful impact."

Help cannot come soon enough for many businesses across the region.

Punchline-Gloucester.com editor Mark Owen said: "Thousands of Gloucestershire firms could fail if a rescue plan is not extended.

"We have spoken to a large number of businesses across many sectors who have already offloaded interns and apprenticeships and are now considering axing members of staff once the furlough period is over.

"Small retailers, small business owners all work together and support each other, they tend to use the local accountant, solicitor, printer, graphic designer and so on - when one goes down the affect is felt badly but if hundreds go down it will be devastating."

He continued: "The Government has done an amazing job introducing support packages, but it has got to go much further or there will be no way back for some firms. Many are feeling scared and looking down the barrel of a gun.

"They have spent their lives building up their businesses, employing people and making meaningful contributions to their communities - now they need help. Here at Punchline-gloucester.com we are no different".

A survey by Business West, which represent's the region's Chambers of Commerce, showed only 16 per cent of respondents would be able to ride out a six-month lockdown.

In addition, 62 per cent said they already have financial concerns due to the impact of COVID-19 while 88 per cent were concerned about their future financial health.

Small firms are reporting a worse financial impact and greater pessimism with only 11 per cent of businesses employing five to nine staff saying they would be able to cope with a six-month lockdown - a figure which drops to five per cent over 12 months.

Business West's Gloucestershire director Ian Mean said: "The impact of coronavirus is far worse than the financial crisis of 2008 or any recession we can remember.

"These are critical weeks for the economy and for the fate of many firms. We are hearing from the coal face stories of firms, built up by individuals over decades, now looking into the abyss.

"This is a stark reminder of the potential depth of this crisis, with the damage to business risking being cumulatively greater the longer the crisis continues.

"Firms falling through cracks in support packages for a few weeks can be managed, but when these weeks start to become months, they cannot be left unsupported."

Despite the Government's Job Retention Scheme, which pays staff placed on furlough 80 per cent of their salary, the survey found 37 per cent of firms would be taking or considering taking other measures to reduce labour costs.

Mr Mean said: "The furloughing scheme has been a massive lifeline for many firms, but the shock of this economic crisis looks likely to lead to major damage in the labour market and with individual workers.

"Government now needs to think about how we ensure this damage is only temporary and firms are able to drive a recovery that gets back to our previous excellent regional jobs performance."