HomeBusiness

Government will launch £ 3 billion recovery scheme

The government will introduce a £ 3 billion a year guarantee scheme for small business recovery to build on Covid-19 financial support.

Government will launch £ 3 billion recovery scheme
Google banned 3.4 billion ads, suspended 5.6 million accounts in 2021
Apple’s advertising business could reach $6 billion by 2025

This post may contain affiliate links, which means that I may earn a commission if you click on the link & sign-up or make a purchase. You will NOT be charged extra for using the link, but it goes a long way in supporting this blog. I only recommend products or services that I have personally used or believe will add value to my readers.

The government will introduce a £ 3 billion a year guarantee scheme for small business recovery to build on Covid-19 financial support.

The £ 3 billion loan scheme for business recovery will provide a government guarantee for up to 70 per cent of the loan, according to the Financial Times.

By comparison, the £ 47 billion lending scheme had a 100 per cent guarantee, while the Coronavirus Business Interruption Loan Scheme (CBILS) covered 80 per cent.

> See also: Treasury small business loans can be permanent

Unlike previous Covid-19 financial support, however, lenders will have to provide personal guarantees – meaning they will be on the lookout for payment defaults before any government backstop is triggered. It should serve as a deterrent to any criminals hoping to get a quick and easy credit decision with no intention of repaying.

The previous repayment loan scheme has been criticized for handing out money to small businesses with few checks, which has led to peer Lord Agnew calling the whole scheme “one of the most colossal cock-ups in recent government management”.

The Department of Business, Energy and Industry Strategy believes £ 4.9bn could be unsustainable through the £ 47.4bn Bounce Back Loan scheme.

And unlike the repayment scheme, which offered a fixed interest rate of 2.5 percent from year two, the new scheme will offer market interest rates.

Lenders are expected to offer loans of up to £ 2 million through the new scheme.

The new £ 3bn recovery loan scheme is expected to be announced as early as next week and will run for at least two years. T

The current recovery scheme, which guarantees 80 per cent of a bank loan up to £ 10 million, ends on 30 June.

> See also: Failures Revealed in Covid Recovery Scheme

During the course of the pandemic, business loans worth £ 79.3 billion were made through Covid-19 financial support.

Further reading

What happens if I cannot repay my repayment loan?

COMMENTS

WORDPRESS: 0
    error: Content is protected !!