Rishi Sunak set to extend coronavirus business loan support schemes today

THE Chancellor is expected to extend the coronavirus business loan support scheme today to get them through the winter, according to reports.

Rishi Sunak will announce the extra support as part of a wider Winter Economy Plan that will help to prop up the economy during a second wave of Covid-19.

⚠️ Read our coronavirus live blog for the latest news & updates

As part of the package, he will announce a furlough replacement scheme to help prevent mass job losses when it ends on October 31, and extend the VAT cut for the hospitality industry until March 2021.

Businesses will have until the end of November to apply for the state-backed loans introduced during the first few months of lockdown, according to the Financial Times.

The businesses interruptions loans and Future Fund are currently due to close to new applicants at the end of this month, while the bounce back loan deadline is at the start of November.

The scheme encourages banks to lend to ailing businesses by promising they will be guaranteed by the state.

What help is out there businesses and for self-employed workers?

THE government has introduced the following measures to help self-employed workers and businesses during the coronavirus outbreak:

Income-tax deferrals: Self-assessment income tax payments, that were due in July, can be deferred to the end of January next year.

Rent support: Businesses who are struggling to pay their rents are protected from eviction until the end of June.

Coronavirus business interruption loan scheme: SMEs can get loans and overdrafts of up to £5million for up to six years and the government will guarantee up to 80 per of these.

Grants of up to £10,000: Small firms can get grants of up to £10,000 to help with ongoing business costs.

VAT payments: VAT payments can be deferred for three months.

Tax bill help: SMEs that cannot afford their tax bills can ask HMRC for a “time to pay” arrangement so any debt collection is suspended.

Business rates holiday: A 12-month business rates holiday has been introduced for many businesses.

Figures show that so far it has backed £53billion in lending, £35billion of which is through the bounce back scheme alone.

The extension will give banks until the end of the year to process the applications.

It's hoped the state-backed cash will help firms get through another period of tighter restrictions as the winter months close in and coronavirus cases soar.

On Monday, Britain's top scientists issued a Doomsday Covid warning that the nation could face 50,000 new Covid-19 cases a day in just three weeks and deaths will soar if the bug continues to spread at its current rate.

By Tuesday, the PM had brought in stricter measures for England including ordering all retail and restaurant staff to wear masks while at work and slapping a 10pm curfew on pubs.

The government is keen to stave off a full second lockdown over fears it could cause the UK's economic recovery to stall or even crash again.

Even though the restrictions allow businesses to stay open, it is already having a knock on effect on the economy.

What is a bounce back loan?

BOUNCE back loans are for small companies and sole traders whose businesses have been hit by coronavirus.

Under the scheme, which launched on May 4 and is available until November 4, firms can get loans worth up to 25% of their turnover, up to a maximum of £50,000.

These loans are 100% guaranteed by the government, and it will cover the interest on the loans for the first 12 months.

Businesses are then able to pay back the remaining balance over the next five years at a 2.5% interest rate.

The scheme has been described as a “lifeline” although experts have cautioned firms against rushing into debt.

You can’t apply for a bounce back loan and a coronavirus business interruption loan (CBIL).

The CBIL offers more money – between £50,001 and £5million – but is only 80% backed by the government, meaning it's riskier for banks administering payouts.

Restaurants and bars have had more than half of their trade wiped out in areas where curfews have been enforced by local lockdowns, UK Hospitality said.

Business leaders have been calling on the Treasury to extend the loans but officials have resisted, eager to wind down the costly support, according to the FT's sources.

A HM Treasury spokesperson previously told The Sun: "As we have repeatedly said we keep our package of economic support under constant review.

"We have already provided unprecedented support worth £160billion to businesses impacted throughout this period.

"This includes government-backed loans, cutting VAT for the tourism and hospitality sectors, grants of £25,000 and the Coronavirus Job Retention Scheme, which has supported the wages of 9.6 million people so far."

Earlier this month, Lloyds Bank came under fire from the regulator after it told 30,000 small business customers to open paid-for bank accounts with them before they could access the government cash.

Hundreds of thousands of small businesses could receive a payout from insurers if they have been hit by the impact of the pandemic.

Small businesses have been warned to check they’ve got the right coronavirus loan or face paying "twice as much".

Source: Read Full Article