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| Treasury considers 100% guarantee on small firm loans | Treasury considers 100% guarantee on small firm loans |
| (32 minutes later) | |
| The Treasury has confirmed it is considering offering 100% guarantees on loans up to £25,000 for small firms. | The Treasury has confirmed it is considering offering 100% guarantees on loans up to £25,000 for small firms. |
| Chancellor Rishi Sunak said in March that UK-based small and medium-sized business could apply for interest-free loans to help them with Covid-19 related difficulties. | Chancellor Rishi Sunak said in March that UK-based small and medium-sized business could apply for interest-free loans to help them with Covid-19 related difficulties. |
| However, companies say they are still finding it difficult to get credit. | However, companies say they are still finding it difficult to get credit. |
| Bank of England governor Andrew Bailey has questioned whether the system is "too complicated". | Bank of England governor Andrew Bailey has questioned whether the system is "too complicated". |
| According to BBC business editor Simon Jack, eligibility for loans has not yet been decided - namely, how small does a business have to be to qualify for a loan for which the lender gets a 100% guarantee. | According to BBC business editor Simon Jack, eligibility for loans has not yet been decided - namely, how small does a business have to be to qualify for a loan for which the lender gets a 100% guarantee. |
| Our business editor says an announcement is expected next week, if not earlier. | Our business editor says an announcement is expected next week, if not earlier. |
| Laura Hurlocker, who runs a power generation company with her husband, has been turned down for a bank loan to keep the business going amid the virus. | |
| Ms Hurlocker's Luton-based firm, Fourth Generation, supplies power generation equipment to live events, powering concerts hosted by Coldplay, Beyonce and Robbie Williams. | |
| She applied for a CBIL loan from her bank Barclays, with whom she has been a customer for 16 years. | |
| But her bank turned her down, partly because the business had other loans. | |
| The business has some debts because she and her husband have invested £350,000 in equipment for the firm in the last three years. | |
| "We feel we are being penalised," she told the BBC. "To be told because you have an existing loan, you are deemed by us to be unaffordable. It was a kick in the teeth." | |
| As many as one million of the UK's smallest businesses, many employing no more than a dozen workers, could benefit from the new rules, analysts say. | As many as one million of the UK's smallest businesses, many employing no more than a dozen workers, could benefit from the new rules, analysts say. |
| These include shops and pubs, which have been forced to close under coronavirus lockdown measures. | |
| Loans to larger businesses under the coronavirus business interruption loans scheme (CBILS) will continue to get 80% backing. | |
| The CBILS provide loans of up to £5m for companies with a turnover of less than £45m. | |
| However, many firms have complained that loans are coming through too slowly and that some banks have imposed tough criteria on granting credit. |