HM Treasury is mulling an expansion of its loan scheme for midsized businesses in a bid to help a squeezed middle of larger British companies that require more support through the coronavirus crisis.
According to FTAdviser’s sister paper, the Financial Times, Treasury ministers are looking to lift the limit on the amount of funds available to midsized businesses through the government’s Coronavirus Large Business Interruption Loan Scheme.
Currently the scheme allows companies with a turnover of more than £250m to request £50m in bank loans, which come with a government guarantee of 80 per cent.
The FT reported the scheme could be changed to allow companies to borrow up to £200m — four times the amount currently available through the scheme.
The move would come as businesses have been lobbying the government for the cap to be lifted, arguing the £50m limit was too low to fill a several hundred million pound hole left by the crisis.
Last month Britain’s biggest steelmaker, Tata Steel, said the government’s loan schemes were likely to fall short of what it required to make it through the disruption caused by the crisis and the associated lockdown measures.
An increased limit would also help companies such as airports and the leisure industry, which are likely to require much larger loans than £50m, the FT reported.
This would not be the first time the chancellor of the exchequer, Rishi Sunak, has tweaked his coronavirus crisis policies in order to help businesses falling through the cracks.
Last month, he launched a 100 per cent government-backed loan scheme to help the smallest of businesses with loans of between £2,000 and £50,000 after concerns were raised such firms were unable to access the Coronavirus Interruption Business Loan Scheme.
What do you think about the issues raised by this story? Email us on firstname.lastname@example.org to let us know.