Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions he has had with representatives of the Financial Conduct Authority on enabling lenders to (a) restructure and (b) extend loans in light of the covid-19 outbreak.

The Government is committed to regulating only where there is a clear case for doing so, in order to avoid putting additional costs on lenders that would ultimately lead to higher costs for business customers. Business lending is unregulated and is not generally within the scope of the Financial Conduct Authority's (FCA's) conduct rules.

However, the Government has provided unprecedented support to businesses through the emergency Covid-19 loan schemes which have been open since March 2020: over 1.6 million businesses have accessed over £75 billion of finance through the schemes to date.

Whilst it is important that businesses are responsible for repaying any facility they take out, to help businesses repay their loans the Government has taken steps to give them time to get back on their feet. This includes “Pay as You Grow” (PAYG) options for the Bounce Back Loan Scheme (BBLS), giving businesses the option to: repay their BBLS facility over ten years, move temporarily to interest-only payments for periods of up to six months (an option which they can use up to three times), or to pause their repayments entirely for up to six months.

The Government has also amended the Coronavirus Business Interruption Loan Scheme (CBILS) rules to allow lenders to extend loan terms from six to a maximum of ten years at their discretion and where they judge that the borrower is in difficulty and this will help them repay their loan, helping to reduce their monthly repayments.

Businesses which need support should discuss options with their lenders, who are best placed to offer tailored engagement based on individual business’ circumstances.