There’s a confident expectation among those in government and banks that Chancellor Rishi Sunak will offer 100 per cent guarantees on emergency loans to small businesses.
But last week the chancellor stated categorically that the 80 per cent government guarantee for the Coronavirus Business Interruption Loan Scheme (CBILS) would not be changed (which the Prime Minister’s official spokesman also confirmed last week).
The squaring of the circle, to be at least hinted at later today, is that the Treasury will launch a new loan scheme for smaller businesses, with 100 per cent government guarantees, rather than modifying the existing scheme.
The economic impact of this new scheme would be the same as modifying CBILS. Though the politics may be easier for Sunak.
I am told there has been a debate inside the Treasury whether the maximum size of loan in the new 100 per cent guaranteed scheme should be £25,000 or £50,000.
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