Please Note: All information correct at time of writing on 3 April 2020. We do our very best to make sure our information is as up to date as possible, but we’d encourage you to check out our latest articles and to check the government website for updates as they happen.
Earlier today, the Chancellor Rishi Sunak, announced that the Coronavirus Business Interruption Loan Scheme was to be revamped in light of increasing calls from business owners that financial support is not getting through sufficiently quickly, or at all, to those who need it most. Only £145million of the £330billion finance made available by the government has been lent to date.
The Chancellor’s reforms included:
The new rules about security will extend to loans already made to ensure all businesses are treated equally under the scheme. Although the government had previously banned the taking of security against principal private residences, many business owners were not prepared to offer any personal security at a time of such uncertainty and hopefully, these changes, together with the concerted push by government to get money flowing through to SMEs, will ensure help gets to where it is needed.
RBS have already announced that the reforms will lead to a sharp increase in lending to small businesses over the coming days.
The Chancellor will be speaking with banking CEO’s next week to discuss how the schemes are working and “ensure everyone is playing their part”.
After the announcement, Mel Stride, Chair of the Treasury Select Committee, was asked about business owners’ concerns about the rates of interest which could be applied after the initial 12-month interest-free period. He said the Treasury would have to apply pressure on banks to ensure that the interest charged after that time was fair, proportionate and reasonable and this was going to be a major focus for them.
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