UK Chancellor Sunak overhauls small business scheme after deluge of insolvencies–Mirror

Early Friday morning in Asia, the UK’s Mirror came out with the news that the Chancellor Rishi Sunak has been forced to change the scheme meaning larger firms with turnovers as high as £500 million to access support, while opening up the availability of state-backed cash to smaller companies.

Key quotes

The chancellor has been forced to overhaul his emergency aid scheme for small businesses amid warnings about a deluge of insolvencies as companies struggle to access funds.

Sunak has dropped a key feature of the Business Interruption Loan Scheme meaning banks now longer have to assess whether SMEs are eligible for their other lending options.

It is hoped it will mean money gets to business owners faster and with less personal risk involved.

It comes after Business Secretary Alok Sharma this week warned banks it would be 'completely unacceptable' if they were found to be 'unfairly refusing funds to good business in financial difficulty', especially following the taxpayer-funded 2008 bailouts after the financial crash.

FX implications

The news failed to provide any major market reaction as traders are so far used to stimulus and have more interest in coronavirus (COVID-19) updates recently. That said, GBP/USD drops below 1.2400 after the news.