Coronavirus lockdown: Britain mulling new business support scheme

Britain's Chief Secretary to the Treasury Rishi Sunak. (AFP)

Britain is considering a new bailout mechanism to help firms affected by the coronavirus, Sky News reported on Saturday, saying that individual loans to companies could be bundled together into securities.

Finance minister Rishi Sunak has already set out a range of different schemes to help companies through a national lockdown which has effectively shuttered large parts of the world's fifth largest economy.

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Sunak was now considering an additional program to help provide loans to companies in sectors seen as making a material contribution to the economy such as aviation, retail and hospitality, Sky News reported citing a document circulated to City of London institutions by the finance ministry.

Asked about the report, the finance ministry said: “We’re always open to ways to improve the package but no decisions have been taken.”

Sky News said the proposal included several variations around the concept of pooling loans into a securitization vehicle, which could then be partially backed by the government or sold to the Bank of England.

Read more: More tough times to come: UK finance minister Sunak

The scheme would potentially benefit larger firms who cannot issue debt in their own right which is eligible for an existing support scheme, but who require loans larger than those available through a separate programaimed at small and medium-sized companies.

The document seen by Sky pre-dates a Treasury decision announced last week which allowed firms with higher turnover to access government support aimed at mid-sized companies.

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Last Update: Wednesday, 20 May 2020 KSA 09:57 - GMT 06:57
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