THE UK Government has announced changes to its business interruption loan scheme in an attempt to ensure more businesses can benefit.
The scheme, unveiled by chancellor Rishi Sunak as part of a raft of measures to support businesses during the COVID-19 pandemic, allows small businesses to apply for commercial loans of up to £5 million, with the government guaranteeing 80% of said loans and covering the first year of interest payments and fees.
Under the changes announced by the UK Government today (April 3), the scheme will now be open to all small businesses affected by COVID-19, not just those which are unable to secure regular commercial financing. Banks have also been banned from requesting personal guarantees for loans under £250,000.
In addition, a new scheme for larger businesses will allow companies with turnovers between £45m and £500m to also apply for finance.
The UK Government has agreed to guarantee 80% of loans up to £25m for these companies. Unlike the small business scheme, interest will be charged on loans to larger companies.
Announcing the changes the chancellor said the government will “continue to work with the financial services sector to ensure that the £330 billion of government support, through loans and guarantees, reaches as many businesses in need as possible”.