Chancellor Rishi Sunak to offer 100 per cent guarantee on loans to small firms to help them survive lockdown
CHANCELLOR Rishi Sunak will offer 100 per cent guarantee on loans to small firms in a fresh bid to help them survive the lockdown.
Up to 20,000 businesses are still waiting for a cash lifeline as applications to banks get bogged down in form-filling.
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MPs have warned of a looming insolvency crisis costing thousands of jobs – despite the government underwriting 80 per cent of all loans.
But Mr Sunak has bowed to pressure and is expected to announce full state backing to loans of up to 325,0000 for “micro” firms struggling to get credit.
Senior bankers have been working with the Treasury on a new scheme aimed at a million tiny firms each employing a handful of workers.
Struggling firms claim the system is strangled by red tape and many will go under before they get the cash they need to survive.
Last week Mr Sunak contacted British Business Bank chief executive Keith Morgan – the agency which accredits lenders to demand that more is done to speed up the process.
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He also spoke to the bosses of individual lender banks next week in an effort to unblock the system.
Many shop owners, truckers and publicans are Tory voters and the Chancellor is expected to move this week to ensure they get the money they need.
The bosses organisation, the CBI, has backed the idea of 100 per cent guarantee and also called for extra financial aid for stricken firms.
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