Rishi Sunak to scrap business support loans in next week’s Budget

Rishi Sunak business loans covid-19 pandemic lockdown
Rishi Sunak will also use the Budget to extend a package of other Covid-19 support measures for business until June
// Chancellor Rishi Sunak to end Covid-19 business support loans in next week’s Budget
// He will reveal a new UK state-guaranteed loan programme
// The emergency coronavirus schemes have so far allowed businesses to borrow £73bn

Rishi Sunak is reportedly planning on scrapping the government’s current Covid-19 business support loans in next week’s Budget.

The Chancellor will use the Budget next week to reveal a new UK state-guaranteed loan programme as ministers scrap emergency coronavirus schemes, which have allowed businesses to borrow £73 billion, Financial Times reported.

Businesses will have until the end of March to apply for loans under those programmes, including the bounce back loans.


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Sunak will also use the Budget to extend a package of other Covid-19 support measures for business until June, including business rates and VAT relief, the furlough job support scheme and the stamp duty holiday.

The new scheme will be launched in early April.

It is expected to offer loans of up to £10 million with an 80 per cent government guarantee, while interest rates will be capped at about 15 per cent.

These rates are higher than 2.5 per cent available on bounce back loans.

The original coronavirus loan schemes were launched in spring last year during the first lockdown as ministers raced to provide funds to cash-starved businesses.

Since then, the programme has backed almost £73 billion of bank loans to 1.6 million smaller businesses.

Sunak is looking to bring back personal guarantees, similar to those used in the coronavirus business interruption loan scheme, that would apply to anyone looking to borrow more than £250,000.

Separately, Sunak is expected to extend the furlough scheme until at least May, when he delivers his Budget.

The scheme is due to run out at the end of the financial year.

Boris Johnson has already signalled that furlough support for workers will continue beyond next month.

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