Chancellor announces new small business loans

Andrew Cummings
May 30, 2020

THE CHANCELLOR of the exchequer has said the government will review who is benefiting from the funds for small businesses after concerns were raised about the distribution and take up of coronavirus loans among black, Asian and ethnic minority business owners.

My Right Honourable Friend, the Economic Secretary, and I have been in close talks with the banks, and I'm pleased to say that these loans will be available from 9am next Monday.

The scheme has been created to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days, and comes alongside the £6 billion awarded in business grants, supporting four million jobs through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms.

Applications will be accepted from 4 May and will be available to most sailing clubs, recognised training centres, instructors, class associations and Sailability groups.

The UK Government has initiated a new loan scheme for businesses in response to evidence that measures already undertaken have largely failed to support businesses in a rapidly imploding economy.

HM Treasury has released more details of its "bounce back" Coronavirus loans system which SME estate agencies and other similarly-sized property industry companies will be able to access next week. Firms will have no interest or repayments for the next 12 months. The loan should reach businesses within days- providing immediate support to those that need it as easily as possible.

"With so many organisations wanting to access the scheme but not yet being counted in the number of applications, we can only assume the current quoted number of applications is so low because businesses have not managed to get past the banks to formally make an application".

Another business owner, who owns a small clothing-based store in Stevenage, has called the fast-track scheme "great news for companies like mine", and has already contacted her bank with an application.
She had previously called her situation "catastrophic", and said that there was "absolutely no help".

"We should not ask the ordinary taxpayers of today and tomorrow to bear the entire risk of lending nearly unlimited sums to businesses who may, in some cases, have very little prospect of paying those loans back and not necessarily because of the impact of the coronavirus".

"Whilst the Government has put in place unprecedented financial measures to support businesses through this hard time, some smaller businesses have found the application process too slow at a time when they are struggling with cash-flow".

The new scheme follows criticism of existing lending programs, with smaller firms reporting difficulty in getting the money from banks who had to underwrite 20% of the loan's value.

"Sole traders, micro-firms and entrepreneurs will now have a simple route to fast finance to stay afloat, without red tape or time-consuming checks", she said. "Every job saved today will ensure a faster recovery tomorrow".

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