Chancellor Rishi Sunak is set to extend the Covid-19 emergency loan program in a bid to support businesses amid mounting cost pressures and severe labor shortages.
Treasury officials are reportedly considering extending the payback loan program, which is scheduled to end on Dec.31, according to reports in the Daily Telegraph.
The extended regime would offer watered-down conditions to businesses. Under the current program, the government insures 80% of loans valued between £ 25,000 and £ 10 million.
Officials are said to be probing what form an extended lending program from banks and financial institutions should take.
The government could support a smaller proportion of loans made under the extended regime to limit potential losses to taxpayers.
Businesses across the UK are grappling with soaring raw material, logistics and energy costs and need to raise wages to attract workers.
Higher cost bases, compounded by shortages of essential inputs generated by increases in the supply chain, are restricting production and hampering the UK’s economic recovery from the Covid-19 crisis.
A Treasury spokesperson told The Telegraph: ‘We have provided over £ 79 billion to 1.6 million businesses through our government-backed Covid loans, including the payback loan program , to ensure that businesses had the financing they needed throughout the pandemic. “