A woman wearing a mask walks across the Millennium Bridge in London, Britain, on March 9, 2020. Photo: Xinhua

The British government has strengthened its coronavirus loan scheme for businesses affected by the COVID-19 pandemic amid grave concerns that the virus will take a heavy toll on the economy.

The government is extending the Coronavirus Business Interruption Loan Scheme (CBILS) so that all viable small businesses affected by COVID-19, not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time, the Chancellor of the Exchequer Rishi Sunak said. Designed for small and medium businesses, the CBILS will help viable business with a turnover of up to 45 million pounds ($55 million) to access finance of up to 5 million pounds.

Meanwhile, Sunak announced the new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will provide a government guarantee of 80 percent to enable banks to make loans of up to 25 million pounds to firms with an annual turnover of between 45 million pounds and 500 million pounds.

Loans backed by a guarantee under the CLBILS will be offered at commercial rates of interest and further details of the scheme will be announced later this month, he said.

According to Sunak, more than 90 million pounds of loans to nearly 1,000 small and medium sized firms have been approved under the CBILS since its launch last week. And the CLBILS has also provided almost 1.9 billion pounds of support to larger firms and a further 1.6 billion pounds have been committed.

But according to latest figures from the UK Finance, a trade association for the British banking and financial services sector, there have now been over 130,000 enquiries from businesses across the country for business interruption loans and only 983 have had finance approved.

Sunak believed the new scheme will help banks approve loans for the smallest businesses as quickly as possible. He said: "We are making great progress on getting much-needed support out to businesses to help manage their cash flows during this difficult time."