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Groups back increased support for crisis-hit firms

6th April 2020

Business groups have welcomed the revamped coronavirus business interruption loan scheme and a new scheme for larger companies.

Last Thursday, Chancellor Rishi Sunak bolstered access to business interruption loans for small firms hit by the COVID-19 lockdown.

Sunak had previously allocated £330 billion of loans to the UK's crisis-hit businesses, but only £145 million had been advanced.

That prompted claims high street banks and other lenders were taking advantage of the plight by charging extortionate interest rates.

To speed up the access to emergency funds, the Government is to underwrite 80% of these loans.

Banks will also be banned from asking company owners to underwrite loans of up to £250,000 with their own assets, such as property or savings.

In addition, the Treasury will offer state-backed loans of up to £25m for larger firms with turnover of between £45m and £500m.

Carolyn Fairbairn, director-general at the Confederation of British Industry, said "the Chancellor's measures will help deliver cash faster to firms battling for survival".

Mike Cherry, chairman at the Federation of Small Businesses, added that "removing personal guarantees for all commercial loans below £250,000 is also very welcome".