Govt. to offer 100% guarantee on SME loans
24th April 2020
The Government could be set to provide a 100% guarantee on loans advanced through the coronavirus business interruption loan scheme.
Small and medium-sized firms have been able to apply for interest-free loans of up to £25,000 since the scheme opened on 2 April 2020.
Figures from UK Finance published this week showed that only 16,624 out of more than 36,000 applications had been successful so far.
More than half of those loans successful applications had been approved in the eight days between 14 April and 22 April 2020.
Stephen Jones, chief Executive at UK Finance, said that "over £2.8 billion of lending had been provided so far".
However, the statistics show that lenders rejected most SMEs and further tweaks to the scheme are under consideration.
The key issue surrounds eligibility for the scheme, with around one million of the smallest firms in the UK - including shops and pubs - being excluded.
The Government is expected to clarify how small a business needs to be to qualify for a loan for which the lender gets a 100% guarantee.