Ministers consider new business support loans from January
Details of the scheme could see loans of up to £10m guaranteed at 80pc
By Telegraph Reporters 13 December 2020 • 10:53pm
The Treasury is preparing changes to its coronavirus loans scheme when the current support measures end in January.
Ministers are considering changes to the business support funds that would include a guarantee of up to 80pc for loans of up to £10m, the Financial Times reported.
Banks would be allowed to set the interest rates on the new loans, expected to be capped at 15pc, and loans would be repaid over a six-year time frame.
In September, Rishi Sunak confirmed the Treasury would work on a "new, successor loan programme, set to begin in January".
The Government has been supporting businesses through the Covid crisis with bounce back loans that has supported £42bn of lending. These have a fixed interest of just 2.5 per cent.
It also offers £5m Coronavirus Business Interruption Loan Scheme (CBILS).
The new loans scheme would vary from loans in the low thousands of pounds up to £10m to be repaid over six years, the Financial Times reported.
The Government's furlough scheme has already been extended to March with the system of tiers expected to last at least until Spring.
Its support loans, first introduced in March, have been repeatedly extended, first to September, then to November and most recently to January 31.
The Treasury said: "Our loan schemes have provided a lifeline to thousands of businesses across the UK — helping them survive this crisis and protecting millions of jobs. We are working on a new, successor loan scheme and will provide more details in due course."
The terms of the deal are still being thrashed out and it is possible the Treasury could extend its existing loans schemes beyond the end of January.
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