Rishi Sunak yesterday in the House of Commons agreed to free up small businesses from big bank bureaucracy.
The Chancellor through a new loan scheme starting next week, is underwriting 100% of loans provided to help small businesses through the Covid-19 crisis.
Small business owners throughout the UK will have celebrated on hearing the news, none more so than those in the business of hospitality.
The scheme aims to discard a backlog of loan processes by banks that have come under increasing fire in recent weeks. The new loan scheme will address the short term needs of small businesses impacted by Covid-19. Saving many from extinction.
Chancellor rescues small hospitality by funds being approved in days
The Chancellor’s new offering will see loans of up to £50,000 made available within days of applying. The scheme requires filling out a simple two-page self-certification form online.
Chancellor rescues small hospitality injecting liquidity and cashflow
The terms of the loans will see no capital or interest repayments being due for one year. The government will pay the interest for the first 12 months.
These terms will not only inject some much needed liquidity into businesses, the terms also prudently eases cashflow.
Banks have been widely criticised for delays in agreeing loans, and for not contributing to UK PLC’s business crisis.
Rishi Sunak himself has also come under much fire, as the banks simply weren’t doing what he had asked for.
Banks sidelined
The Chancellor through underwriting the loans, removes any resistance from the banks to ignore him further.
Mr Sunak told the Commons his new scheme would speed up both the application process, and funds arriving in the accounts of those that need it most. He summed it up very eloquently by stating: He is providing a simple, quick, and easy solution.
Looks like he might have been inspired by his counterparts in Switzerland.
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