Chancellor Announces Further Financial Aid for Hard Hit Businesses

Small businesses were handed a lifeline on Monday when the Chancellor, Rishi Sunak announced a new microloan scheme, ensuring that companies could get access to much-needed funds. Small firms are now able to access 100% taxpayer-backed loans of up to £50,000.

The move comes in reaction to criticism from businesses who were finding it difficult to gain access to these loans due to lengthy credit checks. With the country still in lockdown, banks are burdened with heavy workloads, as well as being short-staffed, meaning that firms are waiting too long for financial help. With the government taking on the risk and removing pressure off the banks, the hope is that this should speed up the process, freeing up much-needed capital.

The application process is relatively simple, requiring the completion of a two-page, self-certification form online. The government will pay the interest on these loans for the first 12 months, giving business owners time to repay without mounting debt.

This microloan scheme followed the recent announcement from the Chancellor about a massive £1.25 billion coronavirus package, specifically aimed at businesses driving innovation and development.

Firms which fuel innovation are vital to the overall growth and success of the country and the government has recognised the need for assistance during the pandemic. This will include a £500 million Future Fund for high growth businesses. This fund is made up of both government and private sector contributions, with private entities matching the government’s contribution.

There’s also £750 million allocated for small and medium-sized enterprises in the form of grants and loans. This funding is specific to SMEs that are conducting research and development.

The news of these funds was met with delight and relief from those within the sector. The UK is at the forefront of innovation, whether that be science, analytics or even clean energy and many of the firms working within these areas are smaller and more vulnerable. With backing from the government and the private sector, dynamic and innovative businesses will have access to the vital capital required for them to continue operating, ensuring that the UK remains at the forefront of innovation.

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Notes for editors

Salhan Accountants is a Birmingham-based accountancy firm with offices in the West Midlands and London. It offers a wide range of personal and business services and has won numerous awards. Its most recent accolade was at the English Women’s Awards, where Director Dr Anjulika Salhan won in the Accounting and Finance category.

The full Salhan 2020 Budget Report is available here.

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