A new £6billion business loan scheme is expected to be given the green light by ministers this week, providing firms with cheap debt to survive the current cost crisis and any short-term downturn.
The Daily Telegraph reports that a longer-term successor to the Recovery Loan Scheme (RLS), which offered a 70% government guarantee for loans of up to £2million, is expected to be signed off by the Treasury "within days".
The loan guarantee scheme, dubbed by insiders as RLS2, will be less generous than its predecessor but aims to provide up to £3bn a year over at least two years as recession looms.
The first RLS ended on June 30, leaving businesses in need of more debt support in limbo.
Under the loan guarantee schemes, the Government has pledged to swallow losses on loans made to businesses in a bid to boost lending by banks.
A UK Government spokesman told the Telegraph: “We’ve supported the economy throughout the pandemic, providing around £400 billion to help protect millions of jobs, and we continue to stand behind businesses including through government-backed loan schemes such as the ENABLE Guarantee scheme.
“We are working with lenders to see how we can best continue to support businesses.”
Meanwhile, almost a fifth of a million small businesses have fallen into arrears on their bounceback loan repayments, The Times has revealed.
A Freedom of Information request to the British Business Bank (BBB), the state-run body administering the bounceback scheme, has flushed out a figure of 193,000 firms that have failed to meet their repayment terms as at June 27.
That is about one in eight of the 1.5 million small businesses encouraged to take part in the scheme, the centrepiece of Rishi Sunak’s plan to help smaller firms during the depths of the pandemic when he was chancellor.
It compares with the most up to date official number from BBB of 106,000 bounceback borrowers in arrears as at September 30 2021. It said then that the “overwhelming majority of businesses” were meeting monthly repayments.