Government to extend coronavirus loan programs as cases surge

Monday September 21, 2020 12:00 p.m.

Chancellor Rishi Sunak said in the March budget that the program would be extended until September 30 of this year.

Chancellor Rishi Sunak is expected to expand government coronavirus loan programs in a bid to protect the UK economy during a possible second wave of Covid infections.

All four business loan programs will be extended for applications until the end of November, the Financial Times reported. Banks will be allowed to process loans until the end of the year.

It comes as the government is considering further foreclosure measures that could derail the economic recovery.

Sir Patrick Vallance, the government’s scientific director, today warned that there could be around 50,000 new cases of coronavirus a day by mid-October if things go as they are.

Chris Whitty, England’s chief medical officer, said people must “sever unnecessary ties between households”. This would mean cutting off contacts at work and in social environments, which would likely slow down economic activity.

Sunak had previously appeared keen to end the UK’s costly fiscal stimulus. But last week he said he would be “creative” to support the economy.

Coronavirus loan applications extended

The government launched the Coronavirus Business Interruption Loan (CBILS) program in March to help banks lend to struggling businesses by guaranteeing 80% of the total. He also created a plan for large companies.

He then launched the Rebound Loan Program (BBLS) in May, following criticism that CBILS loans were too slow.

The BBLS has a 100% government guarantee and has made the bulk of the loans against the coronaviruses. He has seen banks give over £ 35bn to 1.1m businesses. In total, the programs have loaned around £ 53 billion.

The two CBILS devices and the future start-up fund were due to close for applications this month. BBLS was scheduled to close on November 4.

But the government will extend the application dates for all programs until the end of November, the Financial Times reported, citing sources close to the talks. The Treasury declined to comment.

Sunak also faces strong pressure to extend the leave program – which has supported more than 9 million jobs – in one form or another.

The Chancellor has said on several occasions that it will end in October. However, he said last week that he would continue to “act creatively and effectively to support jobs and jobs”. This has sparked speculation that he could create a new wage support scheme for certain industries.

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