UK launches new loan scheme to help struggling companies recover

Loans will help businesses that struggled during UK's strict lockdown

FILE PHOTO: Britain's Chancellor of the Exchequer (finance minister) Rishi Sunak attends a virtual press conference inside 10 Downing Street in central London, Britain March 3, 2021. Reuters

Britain will on Tuesday launch a government-backed loan scheme to help companies as the economy reopens from a strict lockdown, offering maximum credit of £10 million ($13.9m).

Finance minister Rishi Sunak said the loans, ranging from £25,001 to £10m, would replace existing Covid-19 programmes and add to a grant scheme that has been launched to help companies restart trading.

The scheme will be administered by the British Business Bank, with loans available through commercial lenders and the government providing an 80 per cent guarantee.

It will run until the end of this year and interest rates will be capped at 14.99 per cent.

The government is urging lenders to keep rates down to protect jobs.

It said that so far its emergency loans had supported more than £75 billion of financing.

"As we safely reopen parts of our economy, our new recovery loan scheme will ensure that businesses continue to have access to the finance they need as we move out of this crisis," Mr Sunak said.