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New financial lifeline thrown to small businesses

The government has announced a package including £330 billion worth of government-backed loans and more than £20 billion in tax cuts and grants to help businesses cope with the coronavirus crisis.

During a second coronavirus press conference today, Chancellor Rishi Sunak said the loans equated to 15% of GDP adding: “That means any business who needs access to cash to pay their rent, their salaries, suppliers, or purchase stock will be able to access a government-backed loan or credit on attractive terms.

“And if demand is greater than the initial £330 billion I'm making available today, I will go further and provide as much capacity as required."

The cash boost will be delivered through a new Bank of England lending facility as well as an extension to the business interruption scheme announced in the budget, which will now provide loans of up to £5 million rather than £1.2 million, interest-free for six months.

He also announced cash grants of up to £25,000 for retail, hospitality and leisure businesses with a rateable value below £51,000, while the year-long business rates holiday will be extended to all companies in the hospitality sector.

In addition, cash grants of £3,000 for the smallest businesses, announced in the budget last week, are to be increased to £10,000.

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