Originally written by Timothy Adler on Small Business
Rishi Sunak will announce an overhaul of the government’s coronavirus small business loans scheme on Friday (April 3) in response to mounting anger.
The government will remove the requirement for small businesses to show that they have no other means of funding before accessing the Coronavirus Business Interruption Loan Scheme (CBILS).
Firms trying to use the coronavirus small business loans scheme say banks have been demanding personal guarantees and quoting double-digit interest rates, driving applicants towards standard business loans.
Small business owners told MailOnline that they are being offered interest rates for between seven and 30 per cent on CBILS emergency loans – despite current UK base rate being 0.1 per cent.
Higher interest rate
Denice Purdie of Kinross-based Kapital Residential told Small Business that Bank of Scotland was advising her to apply for a conventional bank loan at a much higher interest rate. “This is not guaranteed and will take too long,” she said.
Sky News reports that Mr Sunak and his Treasury officials have been in talks with participating lenders, which include the high-street banks.
Although all the big banks have stated that they will not force small business borrowers using the CBILS to put up personal guarantees