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The Government loans scheme designed to help firms deal with the impact of the coronavirus outbreak has been expanded to help large businesses says commercial property agent Prop-Search.
Acting amid mounting fears that even relatively wealthy companies are at risk of getting into financial difficulties as a result of the crisis, Chancellor Rishi Sunak has expanded the loans scheme so that all firms with a turnover of more than £45 million will now be able to apply for up to £25 million of finance. Meanwhile, firms with a turnover of more than £250 million will be able to get a Government-backed loan of up to £50 million from lenders.
Simon Toseland, a Director of Prop-Search, said; “With the lockdown extension stretching for another three weeks at least - as announced by Dominic Raab yesterday (16 April) - it is of paramount importance that businesses large and small can remain solvent until a degree of normality returns economically’’.
“The expansion of the loan scheme should provide the support needed by medium to large-sized businesses to protect jobs and put them in a position to resume business when the lockdown ends.”
Under the Coronavirus Business Interruption Loan Scheme, the Treasury guarantees to underwrite 80% of the loan in order to encourage banks to provide the cash to struggling firms. Banks have also been asked by Government not to ask for personal guarantees on any loans under £250,000.
Chancellor Rishi Sunak said: "I want to ensure that no viable business slips through our safety net of support as we help protect jobs and the economy. That is why we are expanding this generous scheme for larger firms.”
"This is a national effort and we’ll continue to work with the financial services sector to ensure that our £330 billion of Government support, through loans and guarantees, reaches as many businesses in need as possible."
Simon Toseland added: “The Government does need to police banks in this initiative, to ensure that they really are being as flexible as possible. The 2008 recession saw the taxpayer bail-out a number of banks. Business feels it’s now time to ‘repay’ that favour.”
It is hoped that the cash will be available to all businesses in the UK from Monday.