The government has changed the rules around business borrowing to survive the COVID-19 crisis, after criticism from firms about difficulties in accessing state-backed support.

While the Treasury has received more than 130,000 loan enquires from firms so far, fewer than 1,000 loans have been activated.

The low figure is thought to reflect the fact that emergency loans carry an 80% government guarantee to the lender, but not to the borrower.

Another blockage was that government-backed loans for small businesses were only available to firms that had been turned down for a commercial loan from their bank.

The key new reliefs introduced yesterday are:

1. Viable companies applying for access to the Coronavirus Business Interruption Loan Scheme will no longer have to seek a normal commercial loan first before applying for state-backed help;

2. A ban on some banks’ practice of asking for personal guarantees of savings or property for granting loans of up to £250,000.

3. CBILS loans are for up to £5m and aimed at companies with an annual turnover of less than £45m. Unveiled yesterday is a new loan for larger firms to access - the Coronavirus Large Business Interruption Loan Scheme. Companies with a turnover of between £45m-500m can borrow up to £25m, the loans largely guaranteed by the state.

Firms have also complained that while CBILS loans are interest-free for 12 months and carry no upfront fees, there is no cap on interest rates banks can charge after the one-year period. Government said it would monitor the situation.

Sir Howard Davies, chairman of RBS, one of those banks bailed out by taxpayers in 2008, said he expected to see a "sharp increase" in lending to small firms in the next few days as a result of the new measures.

Has your business applied for a government loan to cope with COVID-19? The Daily Update would like to hear your story. Please email editor@export.org.uk