Sunak set to overhaul Covid loan programme: Bounce back scheme to close at end of March
The Chancellor is set to shake up the Government’s emergency Covid loan programme in next week’s Budget.
Rishi Sunak will close the Bounce Back Loan Scheme at the end of March, the Mail understands, ending the support directed at Britain’s smallest businesses.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) for big firms will also be shut.
Shake-up: Chancellor Rishi Sunak will close the Bounce Back Loan Scheme at the end of March, the Mail understands, ending the support directed at Britain’s smallest businesses
But the Coronavirus Business Interruption Loan Scheme (CBILS), which was aimed at mid-sized companies and has seen banks lend £22billion to 92,449 firms, will morph into a ‘recovery loan’ scheme.
This scheme will still carry the 80 per cent Government guarantee – meaning taxpayers will be on the hook for 80 per cent of any losses that the banks incur if customers are unable to pay up.
But unlike CBILS, where interest rates were capped at 14.99 per cent to prevent banks charging sky-high rates, there is speculation that the new scheme will not carry a cap.
A final decision has not yet been made, the Mail understands.
Take-up of the various emergency loans has been slowing in recent weeks.
It is understood that Treasury officials feel larger businesses have had enough time and support to shore up their balance sheets.
And Sunak hopes small businesses using the Bounce Back scheme will be able to start getting back on their feet now Boris Johnson has outlined his four-step plan to unlocking the economy.
But mid-sized businesses, which tend to have more staff who need paying and other costs to meet during lockdown, are likely to still need a lifeline.