Small business loan program to be extended by two years | business news

A program offering government-backed loans to small businesses will be extended for another two years, the economy minister has announced.

Kwasi Kwarteng said on Wednesday: “Small businesses are the lifeblood of the UK economy which is why we are determined to support our traders and entrepreneurs as we navigate global inflationary pressures.

“The extension of the Recovery Loan Scheme will help ensure we continue to provide much-needed finance to thousands of small businesses across the country, while energizing local communities, creating jobs and driving economic growth in the UK.”

Launched in April 2021 during the COVID-19 pandemic, the scheme has helped more than 16,000 businesses in England, 1,000 in Scotland, 600 in Wales and 300 in Northern Ireland with an average of £202,000 each.

Many companies are still struggling with the effects of the pandemic – with high numbers of infections, illness and absenteeism among employees remain a problem.

And like customers, they too are struggling with the rapidly rising costs of necessities like fuel and energy.

Shevaun Haviland, Director General of the British Chambers of Commerce said: “After two years of pandemic disruption and a faltering global economy, the BCC has called for this continued financial support for businesses.

“The two-year extension of the Recovery Loan Scheme will be a lifeline for many businesses facing rising costs.

“It’s important now that businesses that need this extra support can access the program as soon as possible to ensure they get help before it’s too late.”

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Chancellor Nadhim Zahawi said the principle of the program would not change – the government would assume 70% of lender liabilities at the individual borrower level for a lender fee.

Lenders must ensure that the benefits of the government guarantee are passed on to companies.

However, with many companies now in a better position than when the program began, lenders could require the borrower to provide a personal guarantee, Mr Zahawi said.

The maximum loan size remains £2 million.

Small business loan program to be extended by two years | business news

Source link Small business loan program to be extended by two years | business news

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