The chancellor Rishi Sunak has announced a new micro-loan scheme for small businesses, to alleviate the impact of the coronavirus lockdown, with both the Booksellers Association and the Independent Publishers Guild welcoming the step.
Firms will be able to get loans of a value up to 25% of turnover, with a maximum of £50,000, with the government paying the interest on the loan for the first 12 months. The new “bounceback" loans will be 100% guaranteed by the Treasury, and will be available from next Monday (4th May).
Sunak promised the new loans would be a "simple, quick and easy" solution, without complex eligibility criteria, and that for most firms loans should arrive within 24 hours of being approved.
The business interruption loans previously introduced by the government are only guaranteed 80% by the Treasury, making banks reportedly less ready to lend.
Bridget Shine, chief executive of the IPG, said: “This is a very welcome scheme that will provide a much-needed injection for the many publishers facing cashflow challenges at the moment. Removing fees, interest and payments for a year will give businesses the time they need to get back to normal trading on the other side of the pandemic lockdown. But it is vital that lenders now deliver on the government’s promises that applications will be simple and that money will flow out to businesses fast, because every day of delay is critical for some borrowers.”
Meryl Halls, m.d. at the BA, commented: "The announcement of the micro-loan scheme is a welcome step towards helping bookshops at this immensely challenging time. Booksellers have been significantly impacted by Covid-19, and will continue to be affected when lockdown restrictions are eased. It is therefore vital that the Government steps in to do all it can to support the sector, and we hope that they will go further by introducing rent relief, tax breaks and beyond."
Stephen Lotinga, c.e.o. of the Publishers Association, also welcomed the scheme, although he repeated calls for extra initiatives to help the industry.
He said: “This is a really important step by the government in ensuring access to crucial finance for small and micro businesses which could be the difference between closure and survival in the months ahead. I would also urge those SME publishers who are in need of support to look to the emergency funding available from the Arts Council and to get in touch if they need any help.
“However, UK publishing does need more support to get back on its feet and we continue to call on the government to extend business rates relief to publishers and to allow bookshops the option to re-open as soon as it is safe to do so.”
The latest government step comes after many leading figures in the creative industries this week called for more government support, warning that half the UK's creative businesses could be lost due to the pandemic, with financial reserves for many running out within weeks.
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