Indeed, the Chancellor of the Exchequer, who has only held the post for a few months, staged a press conference revealing that he would be providing unprecedented government support for businesses and working people all across the UK. The state pledged to step in and help out small companies that would be facing financial ruin by having to remain shut for trade, as well as offering a furlough scheme in which the government would cover 80% of wages for workers earning up to £2,500 per month.
One of the key strategies laid out by Sunak was that small and medium businesses in the UK would be able to apply for business loans of up to £5 million to help them with running costs, overheads, rents, and paying their staff. However, there has been controversy as big banks have been refusing these loans to a lot of businesses, and there have even been problems getting in touch with a lot of the larger lenders.
Additionally, those who have been agreeable to offering the loans have insisted on personal guarantees.
This basically means that if a business goes under and the loan cannot be repaid, the banks can go after the personal property of the business owner in lieu of repayment. Despite the main home or property of the business owner being protected, the banks would be able to claim other assets. These include things like savings, shares, and second homes.
This has led to many worrying that business owners and companies are not going to take advantage of these emergency loans, and this will see more businesses going under during this crisis, especially as nobody knows how long the economic situation might be going on for.
The British Business Bank (BBB) has moved to reassure business owners that they should look for other lenders, and that they will not be required to use their private residents as security, but that lenders may require some other kind of security to back the loan in part.
Alternative Business Loans
There are alternatives to the Cornavirus Business Interruption Loan Scheme and the big lenders that administer them. At Century Business Finance, we work with lenders that can offer low rate business loans with fast decisions and same-day funds.
Quick Online Application
Takes 2 minutes!
We’ll Find The Right Lender
A human, not a robot.
Get The Funds
Could be same day.