Response to new loan scheme

Read responses from Bondholders the East Midlands Chamber and the Federation of Small Businesses to the new ‘micro-loan’ scheme launched to help small businesses hit by COVID-19.

This latest intervention announced by Chancellor Rishi Sunak will give smaller firms access to 100% Government-backed loans of up to £50,000 within days of applying.

The East Midlands Chamber’s Director of Policy, Chris Hobson, commented: “Although the Government has already made a significant amount of financial support available to businesses which need it, many have struggled to access it because of the sheer volume of applications being made, the delays in processing them and inconsistencies in the way different lenders are approaching the various loan schemes.

“In the current situation, every day of delay is having a critical impact on businesses which need funding to ease their cashflow and wage pressures, so anything which can be done to quicken the flow of credit to the firms which need it most has to be a good thing.”

Federation of Small Businesses’ National Chairman, Mike Cherry, declared: “The decision by the Chancellor to listen to our recommendation for a 100% guarantee on smaller loans, alongside the creation of a new fast-track system for those applying for them, will give hope to thousands.

“In the long-term, we need to protect the competition achieved in the small business lending market that so many have fought so hard to secure. At the end of this crisis, non-bank lenders are going to be key to economic recovery as part of a thriving small business finance market that does not just rely on the big five banks. We look forward to working with the Government to ensure alternative lenders can play that vital role.”