Lenders warn that a new government loan guarantee scheme is likely to fail amid weak demand for financing in the post-pandemic period among small businesses.
Lending under the recovery loan scheme launched by Rishi Sunak in April should be only a small fraction of previous pandemic lending schemes. Along with reports from banks of limited demand, companies seeking access to government credit report difficulties securing it.
The scheme provides loans of up to £ 10 million and has an 80 percent government guarantee for lenders. Its terms are less generous than previous pandemic lending schemes.
Under the now closed business interruption loans due to coronavirus and loan repayment schemes, about £ 74 billion in government funding has been provided to help