Sunak set to overhaul Business Interruption Loan Scheme

By James McAllister

- Last updated on GMT

Chancellor Rishi Sunak set to overhaul Coronavirus Business Interruption Loan Scheme

Related tags: Coronavirus, Restaurant, Government

Chancellor Rishi Sunak is expected to overhaul his Coronavirus Business Interruption Loan Scheme amid reports many small and medium-sized businesses (SMEs) were struggling to the access funds.

According to Sky News​, Sunak will announce in the coming days that a key feature of the scheme, which requires banks to first assess whether SMEs are eligible for their other lending options, will be removed.

It is understood that Sunak and  his officials at the Treasury were in talks with the participating lenders - which include high street giants such as Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland - yesterday (1 April) regarding the matter. 

An announcement regarding the changes is possible as soon as Friday, according to one insider.

It comes after research conducted by a network of accountants suggested that up to a million SMEs could fold​ as a result of the Coronavirus crisis.

The BBC​ reported yesterday that thousands of struggling firms have said they can't get through to their banks by phone to enquire about the loans, and those that do are being told by the banks they're not eligible.

The Coronavirus Business Interruption Loan Scheme forms the crux of Sunak’s £350bn financial package, designed to help businesses navigate the Coronavirus crisis. 

It’s available specially to UK-based SMEs with an annual turnover of less than £45m, and allows them to borrow up to £5m.

With regards to the hospitality sector, several prominent voices have previously said it isn’t in the interests of many business to try and obtain one of these loans​, with many saying that instead the Government needs to look at lifting the threshold on its Retail and Hospitality Grant Scheme so that more businesses can benefit.

Under the current grant scheme, only businesses with a property that has a rateable value of up to £51,000 are entitled to make a claim. 

Trade body UKHospitality said earlier this week that in the absence of ‘an effective finance solution’, it was now pressing​ for the availability of these grants to be expanded by lifting the threshold.

Related topics: Business & Legislation

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