Government’s Small Business Loan Plan May Not Save Failing Salons
ProfessionalBeautyUK. By Sara McCorquodale. Photo: Piotr Lewandowski. The government has revealed a £20bn loan plan to help small and medium-sized businesses survive the recession but it still may not save certain salons, an industry expert said. Banks will be insured by the state against companies that fail to pay repayments in return for a one-off sum.
It is hoped this will give financial security to businesses made vulnerable by the recession because banks will be in a position to lend desperately needed funds. Peter Mandelson, secretary of State for Business, has stated money will be directed towards innovative firms that are growing and need more money to continue. Under this scheme, companies can borrow up to £1m to help them pay wages or expand. Three quarters of the loan will be guaranteed by the state.
Although this may seem like a life-saving opportunity, Habia chairman Penny Turvey warned business owners to check the small print before they pin their hopes on the scheme.