Chancellor Rishi Sunak has radically changed the way business support loans work.
Admitting that that economy will suffer for far longer than was first hoped, he revealed a new "Pay as You Grow" scheme to replace bounce back loans.
Sunak said bounce back loans have given more than one million small businesses a £38 billion boost to survive.
The new "pay as you grow" scheme would be introduced to give these firms more time to repay the loans.
He told the Commons: "This means loans can now be extended from six to 10 years, nearly halving the average monthly repayment.
"Businesses who are struggling can now choose to make interest-only payments and anyone in real trouble can apply to suspend repayments all together for up to six months.
"No business taking up pay as you grow will see their credit rating affected as a result."
The Treasury said this would lift the burden on more than a million businesses who took out a bounce back loan.
As well as extending the length of the loan from six years to ten, interest-only periods of up to six months and payment holidays will also be available to businesses.
Coronavirus business interruption loan scheme lenders will also be allowed to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
The Chancellor also announced he extend applications for the Government’s coronavirus loan schemes until the end of November.
The new loan plan was one of a number of new support measures announced by the Chancellor.
These included tax cuts seeing hospitality and tourism firms only pay 5% VAT until March 31 next year.
Support for workers was also announced - seeing the Government top up wages of people working reduced hours.
He also announced new self employment grants on similar terms.
