Brentford MP Ruth Cadbury has called for urgent help from the government after local businesses have told her they are on the brink because they cannot get loans from the major banks.

The government is planning to launch a permanent replacement for the £65bn Covid loans programme with new state-backed guarantees to support lending by banks to small to medium-sized business.

The new loan scheme could carry a guarantee of up to 80 per cent for loans of up to £10m for businesses that are deemed viable but unable to obtain finance from their lender, the Financial Times has reported.

Under the plan, which is still being thrashed out by the Treasury, banks will be allowed to set the interest rate for the new loans, although the rate is likely to be capped at about 15 per cent.

Ms Cadbury said: "With ministers set to roll out a new loan scheme for businesses, it's vital that they address the gaps & issues with the current programs.

"I've had local businesses get in touch who can't access loans because banks aren't taking on new customers

"This is having a serious impact on their ability to plan ahead and stay afloat as a business.

"Local jobs are at risk because of this. The government needs to urgently review the flaws in the BBL (Bounce Back Loan Scheme) program and ensure that businesses can get the support that they need."