The bounce-back mortgage program was prolonged to the top of March
Rishi Sunak has extended UK coronavirus emergency funding to the end of March for £ 68 billion, including the bounce back loan program.
The Bounce-Back Loan Program, Coronavirus Business Interruption Loan Scheme, and Coronavirus Large Business Interruption Loan Scheme should be completed by the end of January.
With parts of southern England entering the north in Tier 3 lockdown and effectively closing pubs and restaurants, the Treasury Department has had to support small businesses that have faced severely reduced or no revenue for months.
The Treasury Department said, “We are now extending the programs before Christmas and into the New Year to ensure companies can continue to access the support they need to grow and recover.”
The loan programs provide banks with guarantees that they will be able to quickly and inexpensively lend to companies in difficulty during the pandemic. The Bounce Back Loan Scheme (BBLS) offers a full government guarantee of up to £ 50,000, while the others have a guarantee that the banks cover for about 80 percent of the value of the loan.
However, the government itself has admitted that 60 percent of bounce-back loans are never paid back, leaving the taxpayer with a £ 26 billion bill for the system.
The Ministry of Finance is currently working on a permanent successor to the three programs, which is now being postponed until April.
Holiday extended until April
By extending the loan programs through April, they are in line with the government’s flagship Coronavirus Job Retention Support Scheme, which has now been extended through the end of April.
The government will continue to pay 80 percent of workers’ salaries for hours that were not completed until late April. Employers only have to pay wages, social security contributions (NICS) and pensions for hours worked. and NICS and pensions for hours not worked.
Meanwhile, the Bank of England said it would pump cheaper funds into banks to encourage small business lending while keeping interest rates at 0.1 percent.