Government-backed business loans could be a permanent offer

The government are speaking with banks to discuss making government-backed loans a permanent option for small businesses in the UK.

After the COVID19 pandemic saw financial support schemes, such as the Bounce Back Loan (BBL) and Coronavirus Business Interruption Loan Scheme (CBILS) which helped businesses to survive restrictions and various lockdowns, the government are now discussing whether to make government-backed loans a permanent option. The new scheme would help small businesses to grow.

A banking executive said "There is definite need for a permanent follow-up" from the covid19 financial support schemes.

Points which would need to be decided on include what level to set the guarantee (the BBL was set at 100%, whereas the CBILS was at 80%), should there be a personal guarantee or not, and eligibility criteria (e.g. type of company).

However, the Bounce Back Loan scheme has been widely criticised due to being handed out with little checks against applicants. This has led to some cases of fraud, with an estimate of £4.9bn of the £47.6bn scheme being unrecoverable.

Article by Small Business