By Ben Kerrigan-
The Uk’s impressive Chancellor, Rushi Sunak, has announced access to 100% taxpayer-backed loans after they raised concerns about slow access to existing coronavirus rescue schemes.
Chancellor Rishi Sunak told the House of Commons today that the scheme would start next week, offering firms loans up to £50,000 within days of applying.The loan terms. which do not impose any capital or interest repayments will be available for one year. Under the scheme, the British government will pay the interest for the first 12 months.
The move is a positive sign by the British government to save small firms from going out of business after Uk banks were criticised for delays in handing out loans. Sunak’s loan offers addresses the issues of heavy workload, need to complete the necessary credit checks, and a shortage of staff cited by banks. Sunak told the Commons that The new “microloan scheme” would provide a “simple, quick, easy”.
He said: “I’ve heard some calls for the government to underwrite all our loan schemes with 100% guarantees. I remain unconvinced by the case for doing that universally.
“We should not ask the ordinary taxpayers of today and tomorrow to bear the entire risk of lending almost 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.”
Sunak said the loans will be available from 9am next Monday following talks with banks.
“There will be no forward-looking test of business viability, no complex eligibility criteria, just a simple, quick, standard form for businesses to fill in,” he said. Iunderstand and I share people’s anxiety. But right now the most important thing we can do to protect our economy is to protect the health of our people.
“As my right honourable friend the Prime Minister said this morning, we are making progress, we are beginning to turn the tide.
“But if we lose control of the virus again, we risk seeing a second spike, which we all want to avoid.” Business leaders welcomed the move, with Dame Carolyn Fairbairn, CBI director-general Dame Carolyn Fairbairn calling it transformational for small firms.
“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. “Thousands of businesses could be saved by this lifeline. Banks now need to continue their work in overdrive to get the loans flowing faster.”smaller loans, alongside the creation of a new fast-track system for those applying for them