State will guarantee more loans for small businesses | Budget 2021

A new state-backed loan guarantee scheme will be launched next month to replace emergency credit programmes that have provided £77.6 billion of finance to small businesses during the pandemic.

The recovery loan scheme will provide lenders with a guarantee of 80 per cent on eligible loans of between £25,001 and £10 million. It is intended to ensure that small businesses can continue to access finance after the bounce back loan and coronavirus business interruption loan schemes have been wound down.

The new scheme will be launched on April 6, days after the bounce back loan and coronavirus business interruption loan programmes close for applications at the end of March.

In common with the emergency loan initiatives, the recovery loan scheme is designed to give lenders