The government must extend the loan guarantee scheme to alternative lenders to save businesses, the Alternative Association of Business Finance (AABF) has stated.
The AABF has called upon the government to extend the availability of the new 80 per cent Covid-19 government guaranteed loan fund to all the new lenders.
“I have written to the chancellor, the business secretary and the chief executive of the British Business Bank to draw to their attention that failure to extend the new guaranteed loan scheme to the very lenders who have backed hundreds of thousands of businesses that the high street banks have rejected will result in those businesses not now being supported with their urgent cash flow requirements, with the result that many will fail,” said John Davies, chairman of the AABF.
“Without access to the guarantee scheme and access to the liquidity loan scheme from government the new alternative lenders will simply not have the ability to lend, and many may just have to exit the market.
“This will not only have a devastating effect on businesses but will also remove much needed competition in the banking sector.
“I cannot emphasise enough that the chancellor must act now. A ‘review in due course’ is simply not an option.”