Chancellor Rishi Sunak announced today that businesses affected by local and national restrictions can now claim cash grants of up to £3000 per month.
Fran Boait executive director of Positive Money, said:
“Grants rather than more debt is the right way to help small businesses through this crisis. However, there is a risk that this may have come too little too late, as the government’s loan schemes have already saddled small firms with unsustainable levels of debt, which many will struggle to repay.
“As well as the grants announced today, the government needs to consider writing-off past small business debts it has already guaranteed. Otherwise we will be setting ourselves up for more crises and bailouts down the line, with up to 60% of borrowers expected to default on the government’s Bounce Back Loans Scheme.”
- Details of the Chancellor’s announcement: https://www.gov.uk/government/news/job-support-scheme-expanded-to-firms-required-to-close-due-to-covid-restrictions
- BEIS and the British Business Bank published a preliminary estimate on Wednesday that 35% to 60% of borrowers may default on the loans, based on losses observed in previous programmes which are most similar to the Scheme. NAO Press Release: https://www.nao.org.uk/press-release/investigation-into-the-bounce-back-loan-scheme/
- Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. https://positivemoney.org/
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