THE Chancellor is set to force banks to lend cash to desperate businesses NOW in bid to save hundreds of thousands of jobs.
Rishi Sunak will unveil a massive overhaul of the Government’s bailout scheme after banks blocked businesses from getting the help they need because of the coronavirus.
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It comes after companies complained banks were making unrealistic demands, refusing to issue loans, or not even answering the phone.
Banks are set to be banned from asking for personal guarantees on loans, and also ordered to relax other rules to help Britain’s businesses survive.
Without the help, it was claimed yesterday one in five small companies would go under in the next month, resulting in nearly four million people losing their jobs.
Meanwhile, today the British Chamber of Commerce warned nearly half of firms will furlough at least half of their workforce over the next week.
Speaking yesterday, the business secretary Alok Sharma slapped down the banks over their behaviour.
He said: “It would be completely unacceptable if any banks were unfairly refusing funds to good businesses in financial difficulty.
“Just as the taxpayer stepped in to help the banks back in 2008 we will work with the banks to do everything they can to repay that favour to support the businesses and people of the UK in their time of need.”
Just two weeks ago Mr Sunak had promised businesses Coronavirus Business Interruption loans of up to £5m to help them survive.
With most branches closed, thousands of firms are struggling to get the cash they were promised just a fortnight before.
Those that are open are then limiting the number of customers that can be in a branch at any one time, making it even harder for people to get the help promised.
After a huge outcry, the Government has now been forced to intervene to keep the banks in check.
Now loans worth up to £250,000 will no longer require any form of personal guarantees, stopping businesses from having to put up assets or their second homes.
For loans of more than this, personal guarantees will not be able to go higher than 20 per cent of the outstanding debt.
Mr Sunak will also seek to stop people being exploited by banning double-digit interest rates.
Banks to offer credit card and loan payment holidays and £500 interest-free overdrafts to struggling customers
BANKS have been ordered to give struggling credit card and loan customers a break from payments under new new proposals announced today.
The Financial Conduct Authority (FCA) has demanded banks also offer £500 interest-free overdrafts to customers who have been hit financially during the coronavirus crisis.
The temporary measures would see repayments on credit cards and loans paused for up to three months.
Firms could also be asked to consider other ways to help borrowers, such as reductions in monthly payments.
Interest will still be charged on accounts as long as customers can afford it.
Banks have until next Monday to respond to the FCA about the plans.
The new measures have been brought in following criticism that banks aren’t doing enough to help small businesses and customers.
In a boost for charities, the Government is also drawing up a separate support package.
It comes on the same day struggling credit card customers and loan borrowers are set to be given a temporary payment freeze.
The Financial Conduct Authority (FCA) is also asking banks to offer £500 interest-free overdrafts to customers who have been hit financially during the coronavirus crisis.
The temporary measures would see repayments on credit cards and loans paused for up to three months.
Firms could also be asked to consider other ways to help borrowers, such as reductions in monthly payments.
Britain’s death toll rose by more than 500 yesterday – and is predicted to hit 1,000 a day by the weekend.
It comes as Boris Johnson vowed to end the coronavirus lockdown with testing for as many people as possible – after a huge day of chaos over ordering kits.
The PM told the nation for the first time that the Government’s exit strategy did involve a mass roll-out of testing – even though Britain is still not doing 10,000 a day.
Despite this, today an MP doctor revealed paramedics are only getting one set of protective kit for an entire 12 hour shift.
Dr Rosena Allin-Khan warned more doctors would die if medical staff weren’t given enough personal protective equipment.
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