Sunak plans to extend the Covid loan program
Rishi Sunak is developing plans to extend his Covid business loan program, fearing that the UK’s economic recovery could be hampered by labor shortages and rising cost pressures.
The Treasury Department is believed to be considering extending the Recovery Loan Scheme (RLS), due to be completed by December 31, which could make terms less generous for businesses.
Officials will consult with banks over the next month to decide whether to continue the loan assistance and adjust terms.
A Whitehall source said the future of the program would be discussed in advance of this month’s budget, but a decision by ministers could be made later.
The RLS was unveiled in March on the budget as a replacement for the coronavirus recovery and disruption loan programs for businesses, and offers an 80 percent guarantee on debt between £ 25,000 and £ 10 million. The state will cover most of the losses on the loans and will help encourage banks to lend to businesses.
The Chancellor will be speaking at the Conservative Congress tomorrow, as a slowing recovery and rising cost pressures increase the case for continued corporate support.
Sources well aware of the discussions said the program was flexible enough to change and stressed that ministers have not yet made a final decision on whether to continue support.
They added, “The program has always been designed to last beyond the end of the year. The only question was what the regulation would look like after the end of the year. “
Options for a revamped system could include cutting the state guarantee, reducing potential taxpayer losses from unpaid debts, and reducing personal guarantee.
A Treasury Department spokesman said, “We raised over $ 79 billion through our government-backed Covid loans, including the Recovery Loan Scheme.