Welcome changes to coronavirus business loans scheme

April 5, 2020

The chair of the Marches Local Enterprise Partnership today welcomed the Government’s revamp of the emergency coronavirus business loans scheme after revealing it had attracted strong criticism across the region.

Mandy Thorn said moves to make it easier for businesses to access the loans were urgently needed as companies across Herefordshire, Shropshire and Telford & Wrekin struggled to survive the crisis.

But Mrs Thorn urged to Government to keep the scheme under review amid concerns banks were charging huge sums in interest and imposing punitive penalty clauses on firms forced to turn to the scheme.

Her comments come after Chancellor Rishi Sunak today opened up the Coronavirus Business Interruption Loan Scheme to all small businesses – not just those who have been denied commercial loans – and also banned banks from asking for personal guarantees on loans below £250,000.

Mrs Thorn said: “I am delighted that the Chancellor has acted to meet some of the concerns about the loans scheme which we have been raising with the Government on behalf of our businesses,” she said.

We know of cases where banks have been asking companies to pay up to 30 per cent interest on these loans and also imposing huge penalty clauses should a company want to repay them early.

And we have heard story after story of local businesses being forced to jump through all sorts of hoops by the banks when they have applied to this scheme which seems to go against everything it was set up to do.

I am disappointed that the Chancellor has not imposed a cap on interest rates in this revamp of the scheme, but really do welcome the measures to free up access to the money. I would urge him to keep the scheme under constant review and not hesitate to act if further changes are needed.

Businesses across our region face a very real and immediate threat to their existence and it is a matter of the utmost urgency that banks start to release this cash without imposing punitive charges and restrictions.”

The LEP – the business-led organisation charged by the Government with delivering economic growth across the Marches – has been gathering feedback from businesses and lobbying the Government for changes to the scheme since it was announced last month.

The Treasury’s own figures showed that it had received more than 130,000 loan enquires from firms but fewer than 1,000 had been approved for small and medium sized firms.

The Chancellor has lifted the restriction which had previously meant loans for small businesses were only available to firms that had been turned down for a commercial loan from their bank. He has also banned lenders from asking company owners to guarantee loans with their own savings or property when borrowing up to £250,000.

However, the Treasury did not put in place restrictions on the interest rates that banks can charge for loans despite Bank of England rates being at an historic low.

Firms with a turnover of up to £500m will also be eligible for more help under the changes.

For the latest details of the coronavirus support available visit http://marchesgrowthhub.co.uk/coronavirus



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The Marches Local Enterprise Partnership has now ceased trading and transferred all its functions to Shropshire Council working with Telford & Wrekin Council and Herefordshire Council, in line with the UK Government's plans for devolution.

The Marches LEP was established in 2011 and hands over an impressive legacy from its 13-year life. In that time the LEP invested over £196m in projects across the Marches, securing in excess of £100m of match funding and supported more than 66,000 business interactions.

The schemes supported have made tangible differences to local communities, increasing skills, creating jobs and improving the physical appearance of many towns.

We would like to thank all the LEP Board Members who have given their time freely over the life of the LEP, as well as all the staff who worked for the LEP over the years. We also want to thank our delivery partners, local education providers and local, regional and national stakeholders who helped us achieve so much.

The Marches Growth Hub will continue to support businesses and will be managed by Shropshire Council, supported by Telford and Wrekin and Herefordshire Councils. Each of the three Local Authorities will also continue to provide direct business support locally. Details of this support will be available through the Marches Growth Hub website and from the Local Authorities directly. Website: www.marchesgrowthhub.co.uk | email: enquiries@marchesgrowthhub.co.uk.

The Marches Careers Hub will continue to be delivered and will be managed by Shropshire Council, supported by Telford & Wrekin and Herefordshire Councils. Website: www.marchescareershub.co.uk | email: info@marchescareershub.co.uk

For any queries about Getting Building Fund (GBF), Local Growth Fund (LGF) and Marches Investment Fund (MIF) projects supported by the Marches LEP please contact: gary.spence@shropshire.gov.uk

For any finance queries please contact: michelle.hodgkiss@shropshire.gov.uk

The solvent liquidation of the Marches LEP is being managed by the Evelyn Partners Limited. For any matter related to this please contact: Camilla.Mulholland@evelyn.com

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