Facebook - Shropshire Business Twitter - Shropshire Business LinkedIn - Shropshire Business
http://www.furrows.co.uk http://www.global-freight.co.uk

Changes to coronavirus loans scheme are welcomed

The chair of the Marches Local Enterprise Partnership has welcomed the Government’s revamp of the emergency coronavirus business loans scheme after revealing it had attracted strong criticism across the region.

Mandy Thorn said moves to make it easier for businesses to access the loans were urgently needed as companies across Herefordshire, Shropshire and Telford & Wrekin struggled to survive the crisis.

But Mrs Thorn urged to Government to keep the scheme under review amid concerns banks were charging huge sums in interest and imposing punitive penalty clauses on firms forced to turn to the scheme.

Her comments come after Chancellor Rishi Sunak opened up the Coronavirus Business Interruption Loan Scheme to all small businesses – not just those who have been denied commercial loans – and also banned banks from asking for personal guarantees on loans below £250,000.

Mrs Thorn said: “I am delighted that the Chancellor has acted to meet some of the concerns about the loans scheme which we have been raising with the Government on behalf of our businesses,” she said.

“We know of cases where banks have been asking companies to pay up to 30 per cent interest on these loans and also imposing huge penalty clauses should a company want to repay them early.

“And we have heard story after story of local businesses being forced to jump through all sorts of hoops by the banks when they have applied to this scheme which seems to go against everything it was set up to do.

“I am disappointed that the Chancellor has not imposed a cap on interest rates in this revamp of the scheme, but really do welcome the measures to free up access to the money. I would urge him to keep the scheme under constant review and not hesitate to act if further changes are needed.

“Businesses across our region face a very real and immediate threat to their existence and it is a matter of the utmost urgency that banks start to release this cash without imposing punitive charges and restrictions.”

The LEP – the business-led organisation charged by the Government with delivering economic growth across the Marches – has been gathering feedback from businesses and lobbying the Government for changes to the scheme since it was announced last month.

The Treasury’s own figures showed that it had received more than 130,000 loan enquires from firms but fewer than 1,000 had been approved for small and medium sized firms.

The Chancellor has lifted the restriction which had previously meant loans for small businesses were only available to firms that had been turned down for a commercial loan from their bank. He has also banned lenders from asking company owners to guarantee loans with their own savings or property when borrowing up to £250,000.

However, the Treasury did not put in place restrictions on the interest rates that banks can charge for loans despite Bank of England rates being at an historic low.

Firms with a turnover of up to £500m will also be eligible for more help under the changes. For the latest details of the coronavirus support available visit http://marchesgrowthhub.co.uk/coronavirus

http://www.birminghambiz.co.uk

£14m boost will help county 'bounce back'

Shrewsbury and Telford projects to benefit

4th August 2020

Goody bags for key workers

Shropshire Festivals deliver to care staff in Shrewsbury

19th May 2020

Manufacturer fit to grow thanks to grant help

Firm can now expand and take on new staff

6th May 2020

Pioneering land deal will support key attraction

£230,000 lifeline for Ironbridge Gorge Museum Trust

3rd July 2020

Travel company on road to green future

Marches grant helps firm install solar panels

30th April 2021

Tougher times still to come for businesses

Analysis of support plans for 'economic emergency'

25th November 2020

£4.6bn lockdown support - reaction

It's only part of the solution, chamber says

4th January 2021

Sunak's latest package: The main points

Analysis from Shropshire employment lawyer

24th September 2020

ANALYSIS: Weighing up Rishi's balancing act

By Brian Evans, Lanyon Bowdler

3rd March 2021

Cautious welcome for Chancellor's mini-budget

Businesses respond to Sunak's wide-ranging update

8th July 2020

New support package addresses some key issues

The legal view on Chancellor's cash support plan

25th September 2020

Marches LEP chief to step down

Gill Hamer moves on to pastures new

10th May 2021

Plans for Castle Quarter unveiled

Proposals will transform area to create distinctive welcome

3rd December 2020

Survey shows huge impact of Coronavirus

Marches LEP asks more businesses to take part in research

22nd April 2020

New support for food and drink sector

Specialist adviser will oversee cluster group

20th November 2020