Rishi Sunak’s Stimulus Loans to Offer £ 10million to Help Businesses Resume Operations | Politics | New
The liquidity will help businesses refinance, restructure and grow after a year of closures and restrictions. Chancellor Rishi Sunak said the program will close the gap when the Covid crisis loans end. He added: “We have stopped at nothing to protect jobs and livelihoods throughout the pandemic and, as the situation evolved, we have ensured that our support continues to meet the needs of businesses. .
“As we safely reopen parts of our economy, our new turnaround loan program will ensure that businesses continue to have access to the financing they need as we emerge from this crisis.”
Banks will offer between £ 25,001 and £ 10million under the scheme from today for the remainder of the year.
Interest rates are capped at a maximum of 14.99%, but lenders have been encouraged to offer them at a much lower rate.
The Treasury has promised to cover 80% of what the banks lend if the companies do not repay the money.
The payback loans are replacing the coronavirus-related bounce-back loans and business interruption loans introduced at the start of the pandemic as businesses struggled to stay afloat.
Over £ 75 billion has been loaned to 1.6 million businesses.
The leave scheme that protects workers’ wages continues to operate until September 30, albeit with higher employer contributions, and new restart grants of up to £ 18,000 are also available to some companies.
Business leaders said the support would help businesses recover from the crisis.
Rain Newton-Smith, chief economist at the Confederation of British Industry, said: “The coronavirus loan programs have provided a vital lifeline for businesses, and therefore its successor – the new payback loan program. – comes as a huge relief for business.
“These loans can be taken out alongside existing Covid loans to help businesses refinance, restructure and grow.”
“The new payback loan program, along with other business financial assistance, will help businesses rebuild themselves and invest for future growth.”
She added: “There remains vital support as restrictions relax and demand returns to normal, enabling businesses to recover, save jobs and support reopening.”
And Suren Thiru, Head of Economics at UK Chambers of Commerce, said: “Access to finance remains crucial for the vitality of a business and therefore the launch of the trade-in loan program is welcome.
“The new system can play a potentially critical role in supporting the recovery by channeling credit to the businesses that need it most.”
David Postings, Managing Director of UK Finance, also welcomed the new initiative: “As attention turns to the economic recovery, we know that many companies still face uncertainty.