The Treasury is in talks with the UKs largest banks about an industry-wide plan to help tackle the tens of billions of pounds of bad debts expected under the governments light-touch coronavirus bounce back loans scheme.
More than 1m of the UKs smallest companies have borrowed 33bn in just two months under the bounce back loan scheme (BBLS), which offers state-guaranteed, six-year facilities of up to 50,000 with only minimal checks on the borrowers ability to repay.
The scheme was designed by the Treasury to allow banks to lend quickly to businesses struggling to survive lockdown, but bankers and officials predict many loans will never be repaid.
The Office for Budget Responsibility said this month that up to 40 per cent of these loans …
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