Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what guidance he plans to issue to banks for companies wanting to apply for an extension to the Bounce Back Loan Scheme which need a higher level of finance than they required in March 2020.

The Government launched the Bounce Back Loan Scheme (BBLS) to ensure that the smallest businesses could access loans of up to £50,000 in a matter of just days. As of 15 November, the scheme had supported nearly 1.4 million businesses with facilities totaling over £42 billion.

On 2 November, the Government adjusted the BBLS rules to allow those businesses who have borrowed less than their maximum (i.e. the lower of £50,000 or 25% of their turnover) to top-up their existing loan to this maximum. Businesses will be able to make use of this option once. We understand that some businesses did not anticipate the disruption to their business from the pandemic would go on for this long. This change will ensure that they are able to benefit from the loan scheme as intended. Those businesses that require finance of over £50,000 should discuss alternative options with their lenders, including the possibility of refinancing into a loan under the Coronavirus Business Interruption Loan Scheme.

The Government has also announced the extension of the application deadline for all Covid-19 business loan schemes, including BBLS to 31 January 2021. This extension ensures that businesses have more time to make loan applications, supporting them through the pandemic.