Government warns banks not to deny companies help
Business Secretary Alok Sharma has issued a stark warning to banks, after it was revealed up to a million companies could fold because they could be denied emergency loans.
“It would be completely unacceptable if any banks were unfairly refusing funds to good businesses in financial difficulty,” Mr Sharma said.
The government-backed loan scheme aims to ensure companies can access cash as the UK lockdown slows the economy.
But some say loans have been denied.
Speaking in Downing Street on Wednesday, Mr Sharma referenced the financial crisis – when the government bailed out a number of the UK’s largest banks.
“Just as the taxpayer stepped in to help the banks back in 2008, we will work with the banks to do everything they can to repay that favour and support the businesses and people of the United Kingdom in their time of need,” he said.
Banks have been criticised by companies and MPs for insisting directors put their own property or savings up as collateral before they are approved for the emergency loans.
Businesses have also complained of banks charging interest rates of up to 30%.