Chancellor: Taxpayer could underwrite 100% of business interruption loans

Ryan Fowler

April 14, 2020

mps remediation

Chancellor Rishi Sunak has said that the government, and more pertinently the taxpayer, could underwrite 100% of loans issued under its flagship coronavirus business interruption loan scheme (CBILS).

The government has faced criticism after Business Secretary Alok Sharma admitted that just 1.4% of businesses that had enquired about CBILS have been successful.

Sharma told Sky’s Sophy Ridge on Sunday: “The latest figure that I have is around 4,200, and just over £800m has gone out.

“I have spent the last couple of days talking directly to some of the largest lenders who are part of this scheme and I have been very clear to say to them that we need to get money out of the door as quickly as possible.”

Tens of thousands have made formal applications but banks have been slammed for making the scheme too difficult to access for many.

On 3 April, Sunak loosened the criteria for CBILS loans and banned banks from asking for personal guarantees.

Following the recent criticism there have been calls for the government to offer 100% loan guarantees in some circumstances – this is already in place in some countries on the continent.

Answering journalists’ questions during the daily Number 10 press conference the Chancellor has said that he will look at this moving forward.

However, he stressed that it would be taxpayers’ funds at risk.

He also gave an update on when businesses should be able to apply for money to help pay furloughed staff. He said this would be “on or around” 20 April.

“That is the working assumption”, he adds, with testing of the new system currently being carried out.

There will be a gap of “several days” between applying for help and getting the cash, he added, to allow for fraud checks and the BACS payment process.

Asked if he believes the UK economy could quickly get back to normal after the coronavirus emergency, albeit with record levels of debt, Chancellor Rishi Sunak said it was “possible”.

The aim is to “keep as much of the productive capacity of our economy as possible,” added the chancellor.

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