Treasury considers extension of recovery loan program
The Treasury plans to extend the Recovery Loan Program (RLS) beyond its December 31 deadline.
The government-backed loan program – which succeeds previous state support measures such as the coronavirus interrupt loan program – was launched on April 6 to help businesses recover from the pandemic.
The scheme is expected to close at the end of the year, but the Treasury is considering an extension of the scheme with less generous terms for businesses, according to The The telegraph of the day.
Officials are expected to meet with the banks over the next month to decide whether to continue the program and whether to adjust the terms.
Potential options, including reducing the government guarantee to reduce the potential losses that taxpayers could incur due to unpaid debts.
A source from Whitehall cited by The daily telegraph said the future of the program was being discussed ahead of this month’s budget, but a decision from ministers could come later.
Read more: Alternative lenders accredited for the payback loan program
“We have provided over £ 79bn to 1.6 million businesses through our government-backed Covid loans, including the RLS, to ensure businesses have the financing they need throughout the pandemic, “said a spokesperson for the Treasury. The daily telegraph.
Chancellor Rishi Sunak (pictured) unveiled the Covid support program in his March budget, which grants loans between £ 25,000 and £ 10million to businesses, with 80% of the value of the loan guaranteed by the government.
From the start, it was made clear that the program was to last until the end of the year, subject to review.
A number of alternative lenders have been accredited to provide RLS loans, including ThinCats and MarketFinance, as well as peer-to-peer lending platforms Funding Circle and Assetz Capital. Peer2Peer Financial News understands that at least one other P2P lender is awaiting program approval.
The Treasury and the British Business Bank have both been contacted for comment.