The payback loan program is launched today
- new loan program will provide additional support to protect businesses and jobs
- the loans will include an 80% government guarantee and an interest rate cap
- the government has backed £ 75bn in loans to date in an unprecedented £ 350bn support plan
The payback loan program will ensure businesses continue to benefit from government guaranteed funding throughout 2021.
With non-essential outdoor retail and hospitality reopening next week, ministers ensured that appropriate support was always available for businesses to protect jobs. As of today, businesses – ranging from cafes and restaurants to hairdressers and gyms – can access loans ranging in size from £ 25,000 to a maximum of £ 10million. Bill and asset financing is available from £ 1,000.
The Chancellor of the Exchequer, Rishi Sunak, said:
We have stopped at nothing to protect jobs and livelihoods throughout the pandemic, and as the situation unfolds, we have ensured that our support continues to meet the needs. enterprises.
As we safely reopen parts of our economy, our new stimulus loan program will ensure businesses continue to have access to the financing they need as we emerge from this crisis.
This is in addition to the extension of the leave until September 30 and the new restart grant scheme launched last week, providing funding of up to £ 18,000 to eligible businesses. The government is also complementing this with the Jobs Plan, which focuses on protecting, supporting and creating jobs across the country through the Kickstart Program, T-Level and a National Career Service.
The program, which was announced in the budget and will run until December 31, 2021, will be administered by the British Business Bank, with loans available through a diverse network of accredited commercial lenders. 26 lenders have already been accredited for the first day of the program, more to come shortly, and the government will provide an 80% guarantee for all loans. Interest rates have been capped at 14.99% and are expected to be much lower than the vast majority of cases, and ministers urge lenders to ensure they keep rates low to help protect jobs . The recovery loan program can be used as an additional loan in addition to the support received from emergency programs – such as the Bounce Back loan program and the Coronavirus Business Interruption Loan program – put in place. last year.
So far, the government’s emergency lending programs have supported more than £ 75 billion in financing for 1.6 million UK businesses and this new program will build on that success. It’s part of the government’s unprecedented £ 350 billion support package, which includes paying millions of workers’ wages through the leave scheme and generous grants and tax deferrals.
Business Secretary Kwasi Kwarteng said:
We are doing all we can to support businesses as we carefully reopen our economy and reclaim our way of life.
The launch of our new Stimulus Loan program will provide businesses with a solid foundation on which to plan, protect jobs and prepare for a safe reopening as we rebuild better after the pandemic.
Reactions from business groups:
Rain Newton-Smith, chief economist at CBI, said:
Coronavirus loan programs have provided a vital lifeline for businesses, and its successor – the new payback loan program – is therefore a huge relief for businesses.
These loans can be taken out alongside existing COVID loans to help businesses refinance, restructure and grow.
Its vital support remains as restrictions relax and demand returns to normal, allowing businesses to recover, save jobs and support reopening.
Access to finance remains crucial for the vitality of a business and the launch of the recovery loan program is therefore welcome. The new regime can play a potentially essential role in supporting the recovery by enabling the businesses that need it most to benefit from credit.
Chambers of Commerce will continue to work with government and banks to ensure businesses have the clarity they need to allow them to use the new agenda to help them get back to growth.
David Postings, Managing Director of UK Finance, said:
The banking and financial sector remains committed to supporting businesses of all sizes throughout the next phase of the pandemic response. While the focus is on economic recovery, we know that many businesses still face uncertainty. The new payback loan program, along with other business financial supports, will help businesses rebuild and invest for future growth.