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U.K. banks have issued 4,200 loans to help companies cope with the interruption to their business caused by the coronavirus pandemic, Business Secretary Alok Sharma said.
The lending so far to small- and medium-sized businesses totals 800 million pounds ($1 billion), Sharma told Sky News in an interview on Sunday. The program had been set up “at speed,” and the government has changed the rules to ensure the money flows more quickly, he said.
“I have spent the last couple of days talking directly to some of the largest lenders who are part of this scheme and I’ve been very clear to say that we need to get money out of the door as quickly as possible,” the business secretary said. “I hope what you will see in the coming days is an increase in money going out. It is vital that we do everything that we can to support our businesses and of course protect jobs.”
The program of government-backed loans, announced in mid-March, was beset by early criticism that not all companies needing them could access the program, that banks were charging high interest rates, and that company directors were being asked to make personal guarantees, forcing the government to make alterations to their guidance to banks.
Former Bank of England Governor Mervyn King told Sky that 4,200 seems like a “low” number.
“I am worried about it because the economy will recover quickly only if we can keep the businesses that existed at the start of it functioning,” King said. “If we have so few business loans being granted, something has gone wrong.”
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