Loans to prop up rural businesses

6 April 2001



Loans to prop up rural businesses

By Isabel Davies

THE government has announced special loan facilities to help Britains rural businesses get through the foot-and-mouth crisis.

Details of the multi-million pound bridging-loan package were announced by Trade and Industry Secretary Stephen Byers on Friday (6 April).

Tourist and retail businesses suffering cash-flow problems can apply for loans of up to 250,000 from the Small Firms Loan Guarantee Scheme (SFLGS).

Mr Byers also pledged greater flexibility on repayments of existing loans.

The changes mean that the SFLGS will now be able to underwrite an extra 120 million in additional loans, he said.

Changes include extending the sectors which can apply for loans under the scheme, including tourism, retailers, caterers, and other local services.

The maximum time for the repayment of loans will be increased by one year to 11 years. Capital repayment breaks will be increased from two to three years.

Mr Byers said “This is a further way the Government can provide significant targeted support to those businesses directly affected by foot-and-mouth disease.”

The Country Land and Business Association (CLA) had been pushing hard for a rural relief package since the beginning of last month.

CLA political advisor Nick Way said the loan scheme had been discussed by the governments rural task force, of which the association is a member.

The idea had gained support from other groups including the South West Regional Development Agency, and the National Farmers Union.

With the outbreak now in its seventh week, pressure had been mounting on the government to offer more assistance to businesses affected.

Earlier in the week the Liberal Democrats said if they were in power they would immediately allocate 100 million to farmers to cover consequential losses.

The party also pledged another 100 million to fund an interest free loan scheme which it claimed could be operated by the banks.

Small farms or businesses with a rateable value of under 50,000 would be able apply for a maximum 20,000 interest free loan, it promised.

Party leader Charles Kennedy said the foot-and-mouth epidemic had devastated the farming community and many small businesses.

“This pack of emergency measures would provide immediate help for consequential losses and get Britains rural economy back to business as usual.”