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Government announces loan scheme for small businesses

THE Chancellor has announced a simple micro loan scheme with a 100% Government-backed guarantee for small businesses.

The new Bounce Back Loans scheme will offer to up £50,000 to small businesses recovering in the wake of the coronavirus crisis and should reach businesses withni days of applying through the short online application.

"Our smallest businesses are the backbone of our economy and play a vital role in their communities," said Chancellor of the Exchequer, Rishi Sunak. "This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.

"This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of thousands of small businesses."

The annonucement shows that he has listened to the concerns of local builders who have struggled to access affordable finance during the lockdown, said the Federation of Master Builders (FMB). However, with many small to medium-sized (SME) construction sites still shut, an SME Support Fund that issues grants, instead of loans, is needed to help builders get back to business once lockdown ends.

Brian Berry, Chief Executive of the FMB, said: “The Chancellor has listened to local builders’ concerns about cashflow, raised by the FMB, and brought forward a simple loan scheme for viable firms. This marks a positive step when just 4% of builders were able to acquire credit through previous schemes.”

“Cashflow is currently builders’ biggest headache because many construction sites remain shut. The combined challenges of accessing scarce materials, working safely in a client’s home, and protecting the health of the construction workforce, has left many firms unable to continue bringing income in. An SME Support Fund in England, and Northern Ireland, similar to the ones in Scotland and Wales, is needed to issue grants and ensure that these firms can hit the ground running post-lockdown.

"Builders, and the construction industry, will thrive if they are able to reinvest their profits back into the economy, rather than paying back a loan.”

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