The Government has extended a business loan scheme to help small businesses struggling due to the coronavirus, but critics say it falls short of the help needed.
The Government has revamped its loans for businesses struggling due to the coronavirus.
It has extended its Coronavirus Business Interruption Loan Scheme so that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time.
The Government is also stopping lenders from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals. It says it will continue to cover the first 12 months of interest and fees.
The scheme has come in for a lot of criticism with many businesses complaining they cannot access loans. Experts say the revamp falls short of what is needed to help them and that it remains easier for businesses to furlough employees or make them redundant.
The Government has also launched a new Coronavirus Large Business Interruption Loan Scheme for larger firms. It will provide a government guarantee of 80% to enable banks to make loans of up to £25 million to firms with an annual turnover of between £45 million and £500 million.
Loans backed by a guarantee will be offered at commercial rates of interest and further details of the scheme will be announced later this month.