The Treasury Department is considering extending its Recovery Loan Scheme (RLS) beyond the December 31st deadline.
However after The daily telegraph, the terms of the renewed regime would be less favorable for companies. Possible changes include reducing the state guarantee to reduce potential losses taxpayers could incur from unpaid debts.
Currently, the government insures 80 percent of the loans, which range from £ 25,000 to £ 1 million.
Officials are due to speak to banks next month to decide whether to adjust terms. It will be discussed ahead of the budget later this month, but a ministerial decision could be made later.
RLS was introduced on April 6th as the successor to the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS). Its purpose is to help companies recover from the pandemic. It was made clear at the time that the end of the year deadline would be subject to review.
The loan was granted by a number of financial service providers but has been less drawn due to the commercial nature of the program. Many applicants have been denied credit because their company’s sales value was not high enough, because of their creditworthiness, or because they have bounce-back credit. Learn more by reading errors discovered in the Covid Recovery Loan Scheme.
When approached, said the British Business Bank Small business that they could not provide any current utilization figures, but assume that the first lot will be ready “before the end of the year”.
A Treasury Department spokesman told the Telegraph: “We raised over $ 79 billion through our government-backed Covid loans, including the Recovery Loan Scheme.
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