Worries that almost one million firms could run out of money in weeks

AN OVERHAUL of the Chancellor’s emergency coronavirus loans scheme for small firms is expected to be announced today after widespread criticism it is failing to support hard-hit businesses.

Rishi Sunak is understood to be planning changes that will ban onerous terms and conditions being imposed by banks, and relax other rules to help make the scheme more accessible.

Researchers have warned that nearly a million small firms could run out of cash within the next four weeks despite the Government’s emergency loans scheme.

A report by The Corporate Finance Network of accountants predicted that almost a fifth of Britain’s five million small businesses would not be able to survive the next month.

The coronavirus loans scheme was designed to offer companies up to £5m interest-free for the first year to help shore up their businesses.

The Government pledged to underwrite 80 per cent of the risk of the bank loans as an incentive for banks to lend to firms in difficulty.

But swathes of small firms have complained the scheme is hard to access and that it is not a level

RISHI SUNAK: The Chancellor is expected to relax rules to help small businesses access loans.

playing field, with some banks using unfair lending tactics.

Banks have come under fire for demanding personal guarantees from business owners that could see their assets being seized, while others have sought to apply high interest rates once the interest rate-free initial period ends.

There are also concerns that lenders have been pushing their own financial products before the emergency loans.

It is thought Richmond MP Mr Sunak will prevent all banks from imposing personal guarantees on business owners for loans under £250,000 – something some of the major players have announced already since coming under pressure.