The government will reportedly extend a Covid recovery loan programme by two years in a boon to Britain’s small businesses.
Chancellor Jeremy Hunt will expand the government lending programme for 24 months in the Budget on Wednesday, according to Sky News.
The scheme, which sees the government guarantee 70 per cent of loans up to £2m for companies turning over less than £45m, was initially founded in 2021 and extended in 2022.
It will now run to 2026, the broadcaster reported, after business groups warned the planned July 2024 recovery loan expiry date would be a cliff-edge for small and medium sized enterprises (SME).
The Federation of Small Businesses (FSB) called for the closure of the scheme – which was launched following the Covid-19 pandemic sparked various state interventions to support the economy, including furlough and other loans – to be delayed in a submission to the Treasury.
“The extension of the loan scheme in 2022 was crucial in helping small firms invest and grow,” they wrote. “It should now be extended beyond its current end date, in July 2024.
“It is performing well and an important feature of the UK’s funding ecosystem and brings many benefits in the case of economic slowdown.”
Some free market critics have suggested the move will distort the funding environment.
The Treasury and the Department for Business and Trade have been contacted for comment.