Garages to gain access to 100% Treasury-backed loans

Published:  27 April, 2020

Garages will from next week be able to access small business loans, 100% backed by the Treasury, Chancellor of the Exchequer Rishi Sunak announced this afternoon (Monday 27 April).

From Monday (4 May), small businesses will be able to take up the loans, worth 25% of their turnover up to £50,000. Interest for the first 12 months will be paid for by government. Funding will be made available within days for those who successfully apply.

The new measures have been enacted due to concern over how slowly existing schemes have been  running, with banks blaming delays on workload and credit check requirements , combined with a shortage of staff. Under the new scheme, Banks will not be required to perform any forward looking tests of businesses viability. Businesses will only have to fill out a standard form online.

The new loans are not part of the £330bn coronavirus business loan programme announced last month, but businesses will not be able to take advantage of both schemes.

Speaking in the House of Commons, the Chancellor said: “I know some small businesses are still struggling to access credit. They are in many ways the most exposed to the effects of the coronavirus. They will need extra support to get through this crisis. Some businesses will not want to take on more debt, but for some others loans will be a part of the answer.”

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