Businesses will now be allowed to top up the amount they have borrowed under the Government’s Covid loan scheme as England prepares to enter a second national lockdown.
Companies that previously decided not to borrowed the full £50,000, or 25% of their turnover, allowed by the loan programme will be now be eligible to receive the extra cash by reapplying with their bank.
The decision to extend the scheme means that businesses will be able to access additional funds ahead of the four week lockdown due to start on Thursday).
The move is good news for businesses that initially borrowed money to survive lockdown but have now realised they may need more capital over the next four weeks.
Alan Lambert, from North London, had been concerned that because he had already accessed the loan scheme his business would suffer without further support. He was eligible to borrow £50,000 from the loan scheme but only took out £35,000 during the early days of the pandemic.
Speaking before the Treasury revealed it would be extending the scheme, Mr Lambert said: “I took what I needed in May, but now in November there is no more help for me.
“Just a simple top-up of £10,000 will keep my business going through Christmas.”
More than 1.3m businesses have so far been given access to vital cash through the Bounce Back Loan Scheme, borrowing over £40bn.
It has been vital in propping up some businesses, and many would have been likely to close their doors without the scheme.
However, some small business owners have found it challenging to access the scheme.
One self-employed businesswoman In North Wales, who wished to remain anonymous, said she applied for a loan at the start of October but it was yet to be approved. Part of the delay was caused because she did not have an account with the bank.
She said: “I’ve now complained because, amongst other things, my business failing, my rent falling behind and struggling to deal with loneliness and isolation of yet another lockdown, it’s impacting on my mental health.”