By Oliver Smith on Wednesday 11 March 2020
Banks to benefit include Metro Bank, Virgin Money and Aldermore.
As part of Rishi Sunak’s 2020 Budget the government has just announced an additional £1bn of guaranteed lending for small businesses via the British Business Bank.
The scheme, entitled the Coronavirus Business Interruption Loan Scheme, is an extension of the bank’s existing Enterprise Finance Guarantee which guarantees loans up to £1.2m.
“The government will offer a generous guarantee on those loans, covering up to 80 per cent of losses, with no fees, so that banks can lend with confidence,” said Sunak, announcing an extension to the 75 per cent that was already covered.
“This will unlock up to £1bn of attractive working capital loans to support small businesses, with more as needed.”
Sunak’s announcement is designed to support businesses in accessing lending and overdrafts during the fallout from the coronavirus epidemic.
A British Business Bank spokesperson told AltFi that as part of the announcement extra resource would be ploughed into the Enterprise Finance Guarantee, and there would be a temporary scrapping of the two per cent charge which is currently levied on lenders to fund the scheme.
Current banks that are involved include challengers like Aldermore, Virgin Money and Metro Bank, along with incumbents including HSBC, NatWest and Santander.