Businesses to be allowed to top up Covid loans under Government plans

Companies that have not taken their full allowance under one of the Government’s Covid-19 loan schemes will be allowed to top up under new plans announced on Monday.

The Treasury said firms that had borrowed less than the maximum £50,000, or 25% of their turnover, will be allowed to top up the extra cash by going back to their banks.

The news follows the announcement of new lockdown restrictions for the whole of England after cases of the virus spiked.

The scheme is likely to quickly provide more cash to thousands of businesses across the country.

Even though he was eligible for up to £50,000, Alan Lambert, from north London, only took a £35,000 loan for one of his businesses early in the pandemic.

“I took what I needed in May, but now in November there is no more help for me,” he told the PA news agency on Monday before the announcement from the Treasury.

In July he asked his bank for a top-up on the loan, but it said he would have to pay back the Bounce Back Loan and then apply for a new one.

“Just a simple top-up of £10,000 will keep my business going through Christmas,” he said.

More than 1.3 million businesses have so far been given access to vital cash through the Bounce Back Loan Scheme, borrowing over £40 billion.

It has been vital in propping up some businesses, and many would have been likely to close their doors without the scheme.

However, the process has proven challenging for many small business owners.

One self-employed businesswoman in North Wales, who asked to remain unnamed, said she had applied for a loan at the start of October but was struggling to be approved.

She was told that delays were due to the fact she did not already have a business account with the bank

“I’ve now complained because, amongst other things, my business failing, my rent falling behind and struggling to deal with loneliness and isolation of yet another lockdown, it’s impacting on my mental health,” she said.

Earlier in the pandemic she had been using the Government’s Self-Employment Income Support Scheme (SEISS).

“I was able to tap into the SEISS grant from the start. Which was great and I’m truly grateful for. However, September to November happened and now I’m in debt.

“I’m scared of losing my home, little to no work is coming in and potential new clients are backing off because we’re too expensive for them.”