Throughout the pandemic and into the current recovery period, the Government has offered a number of loans to help businesses survive and invest for their future.
However, only the Recovery Loan Scheme remains open, and this is due to end on 30 June, with no replacement taking its place.
Despite the popularity and value of these loan schemes, there are concerns that, without them, small businesses will struggle to access the finance they need.
However, it is understood that the Treasury is now in talks with the banking sector about making Government-backed loans to SMEs permanent to help businesses grow.
According to an article in the Financial Times, the loans could mirror previous Covid financial support schemes, including the use of Government backing to give banks the confidence to loan to more businesses.
A source close to the ongoing talks told the Financial Times that the focus of any future funding would be on growth, rather than survival – as had been the case with the previous loan schemes.
Questions are now being asked about the level of support from the Treasury, whether personal guarantees would be needed, and what sort of companies should be eligible.
It is hoped that additional details about new loan schemes could be made public in the coming months, although concern remains about the abuse of COVID financial support measures after the Department for Business, Energy and Industrial Strategy revealed that £4.9 billion could be unrecoverable from the £47.4 billion Bounce Back Loan scheme.
Until then, the current Recovery Loan Scheme, which guarantees 80 per cent of a bank loan up to £10 million remains open until the end of June to support those in need.
Already More than £3 billion has been lent by British banks under this scheme, according to a senior industry executive speaking in the same Financial Times article.
If your business requires additional funding, please get in touch with us and we can help you explore the best options for your particular circumstances.