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Economic Development

Call to change business loan scheme as only fraction of companies able to get help

Business Secretary Alok sharma says banks and officials are working to increase numbers of loans

Business, Energy and Industrial Strategy Secretary Alok Sharma answering questions from the media(Image: PA)

Pressure is growing on the Government to change its business loan schemes after Ministers admitted that less than 2% of firms in the º£½ÇÊÓÆµ had managed to get support from lenders to get them through the coronavirus outbreak.

Business Secretary Alok Sharma admitted in an interview with Sky TV that only 4,200 had received support, saying he “completely understands the concerns that businesses have” about the low number of loans.

He added: “I have spent the last couple of days talking directly to some of the largest lenders who are part of this scheme and I have been very clear to say to them that we need to get money out of the door as quickly as possible.

“They understand that and banks know that, on this occasion, they have to be part of the solution, and they want to be part of the solution.

“The organisations that I’ve talked to have had people working and continue to work over this Bank Holiday weekend so that they can talk to their customers and provide their customers with that support and I hope that what you will see in the coming days is an increase in money flowing out.”

Shadow Business Secretary Ed Miliband has called for the Coronavirus Business Interruption Loan Scheme (CBILS) scheme to be overhauled, while a number of business groups are also calling for action.

Mr Miliband said: “Just 4,200 loans from 300,000 enquiries - businesses need support now.

“The Goverment must overhaul CBILS and underwrite 100% of smaller loans as in Germany and Switzerland. The risk of doing too little too slowly is much greater than the risk of doing too much, too quickly.”