CHANCELLOR CONSIDERS 100 PER CENT GUARANTEE ON LOANS FOR MICRO-BUSINESSES

Chancellor Rishi Sunak is preparing to offer a 100 per cent guarantee on loans to Britain's smallest businesses, following pressure from Conservative MPs and the Bank of England (BoE) (Financial Times, p1, £).

The new scheme would target as many as one million of the smallest companies, typically employing a handful of workers. The support for micro-businesses would run alongside the Coronavirus Business Interruption Loan Scheme (CBILS) which carries an 80 per cent state guarantee on loans of up to £5 million for companies with a turnover of less than £45 million.

According to the Financial Times, the chancellor believes the overall CBIL scheme is starting to work as new data from UK Finance released yesterday shows that smaller companies have received £2.8 billion, which has doubled since last week.

Alison Rose, chief executive of the Royal Bank of Scotland Group, commented on BBC Radio 4 Today that their focus is to get the loans out to businesses as quickly as possible. Ms Rose said the challenge is for businesses to decide whether they want to take on loans and additional debt at a time when the future is very uncertain, and highlighted that there are alternative solutions available to help businesses such as overdrafts and capital repayment holidays.

Separately, the Confederation of British Industry (CBI) said that the government needs to relax lending terms for government-backed loans, and that loans should be repayable over ten years for businesses that face high costs and low profit margins (Reuters). The CBI also suggested that all businesses should be given a three-month business rates holiday (The Times, p35, £).

CORONAVIRUS SCAMS CONTINUE

Covid-19 has spawned a number of sophisticated scams by criminals looking to take advantage of vulnerable people during the crisis. Police are warning that elderly people are being preyed on by criminals posing as NHS workers or local authorities who offer to help them before stealing bank cards under the guise of doing shopping or collecting pensions. Criminals have also posed as undercover police officers to fine members of the public, with one fraudster carrying a contactless machine for immediate payment (The Times, p2, £).

UK Finance has published guidance for self-isolating customers seeking access to cash and wanting to pay for essential items, and reminds customers to follow the advice of the Take Five to Stop Fraud campaign and remain vigilant against criminals using the publicity around coronavirus to target their victims.

NEWS IN BRIEF

Britain's economy is collapsing at record pace, according to IHS Markit's ?flash? purchasing managers? index (The Times, p35, £).

The government has quadrupled its borrowing plans over the next three months, seeking to raise £180 billion (Financial Times, p2, £).

One in four firms has stopped trading due to the coronavirus lockdown (Daily Mail, p4, print only).

A Bloomberg survey reveals that economists expect the European Central Bank (ECB) to increase emergency bond-buying to support the economy that President Christine Lagarde sees shrinking by 15 per cent this year (Bloomberg).

Scottish Building Society chief executive Paul Denton has forecast Scotland's housing market will experience two waves of bounceback when the country emerges from lockdown (Daily Express Scotland, p42, print only)

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