More businesses will be able to access financial support during the coronavirus lockdown after the Chancellor announced a wider package of measures to assist struggling companies.
The move will allow firms with turnovers as high as £500 million to access support, while opening up the availability of state-backed cash to smaller companies.
The Treasury has also confirmed new rules for lenders to ensure money gets to business owners faster and with less personal risk involved.
The Treasury has confirmed:
- A new Coronavirus Large Business Interruption Loan Scheme (CLBILS) providing a Government guarantee of 80 per cent for loans of up to £25 million for firms with turnovers between £45 million and £500 million
- A ban on banks being able to demand debt-risking personal guarantees on loans of less than £250,000 to speed up lending and reduce the risk for applicants
- An expansion of the already-running Coronavirus Business Interruption Loan Scheme (CBILS) to allow "viable" small businesses affected by Covid-19 to apply, no longer limiting it to those unable to secure commercial financing
- More than £90 million has been paid to 983 small and medium sized businesses, with £1.9 billion now in the accounts of larger firms, with a further £1.6 billion committed.
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- Chancellor Rishi Sunak will meet with chief executives of 海角视频 banks to discuss the implementation of the schemes next week.
Mr Sunak said: "We are making great progress on getting much-needed support out to businesses to help manage their cash flows during this difficult time - with millions of pounds of loans and finance being provided to hundreds of firms across the country.
"And now I am taking further action by extending our generous loan scheme so even more businesses can benefit.
"We have also listened to the concerns of some larger businesses affected by Covid-19 and are announcing new support so they can benefit too.
"This is a national effort and we'll continue to work with the financial services sector to ensure that the £330 billion of government support, through loans and guarantees, reaches as many businesses in need as possible."
Earlier in the week Business Secretary Alok Sharma warned banks it would be "completely unacceptable" if they were found to be "unfairly refusing funds to good business in financial difficulty", especially following the taxpayer-funded 2008 bailouts after the financial crash.
Those taking part in CLBILS will see 80 per cent of their loan guaranteed by the Government but, unlike the scheme for small to medium sized businesses, they will not get a 12-month holiday on paying the interest and fees involved.
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For small business loans of more than £250,000, personal guarantees will be limited to just 20 per cent of any amount outstanding on the lending after any other recoveries from business assets, with lenders continuing to be prohibited from asking business owners to put their house on the line.
Mr Sharma said: "The changes we are making to the Coronavirus Business Interruption Loan Scheme will make it easier for business to access the lending we have put in place, helping them to continue trading and protect the livelihoods of their staff."
Labour welcomed the measures but accused the Government of being "behind the curve" in implementing support.
Business bodies, including the British Chambers of Commerce, the Confederation of British Industry (CBI) and the Federation of Small Businesses (FSB), said the measures would help.
CBI director general Dame Carolyn Fairbairn said: "The Chancellor's measures are a big step forward.
"They will help deliver cash faster to firms battling for survival in the headwinds of the pandemic."
Mike Cherry, the FSB's national chair said: "Removing personal guarantees for all commercial loans below £250,000 is very welcome.
"Taking on debt at the current time is a daunting prospect for many small businesses and the self-employed."
Work on delivering support for charities is ongoing, the Treasury confirmed, while the Department for Transport is understood to be in talks with airlines about bespoke help.