Moves to quicken support

Rescue loan scheme revamped after criticism

Liz Cameron

Liz Cameron: ‘remove barriers and prohibitive loan conditions’ (pic: Terry Murden)

Chancellor Rishi Sunak has rejigged his emergency loans scheme for businesses after criticism that it wasn’t working.

The Treasury said it had received more than 130,000 enquires from firms seeking access to the business interruption loan scheme but fewer than 1,000 had been approved.

Mr Sunak’s government-backed loans for small businesses were only available to firms that had been turned down for a commercial loan from their bank. That led to businesses being asked to pay interest rates of up to 30%.

Following the changes to the scheme, applications will not be limited to businesses that have been refused a loan on commercial terms. However, the Treasury did not announce restrictions on the interest rates that banks can charge for loans.

The revamped scheme will offer government-backed loans of up to £25m to firms with revenues of between £45m and £500m.

Larger firms with a turnover of up to £500m will also be eligible for more help.

Rishi Sunak: ‘we are making great progress’

“We have also listened to the concerns of some larger businesses affected by Covid-19 and are announcing new support so they can benefit too,” said Mr Sunak.

Banks will also be banned from asking company owners to guarantee loans with their own savings or property when borrowing up to £250,000.

“We are making great progress on getting much-needed support out to businesses to help manage their cashflows during this difficult time – with millions of pounds of loans and finance being provided to hundreds of firms across the country,” the Chancellor Mr Sunak said.

“And now I am taking further action by extending our generous loan scheme so even more businesses can benefit.”

Dame Carolyn Fairbairn, CBI Director-General, said: “The Chancellor’s measures are a big step forward. They will help deliver cash faster to firms battling for survival in the headwinds of the pandemic. 

“By providing more support for mid-tier companies, they are backing our most significant and iconic regional employers.

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