Chancellor Strengthens Businesses Position on Interruption Loan
On 3 April the Chancellor, Rishi Sunak, gave a boost to businesses aiming to utilise the Coronavirus Business Interruption Loan Scheme (CBILS). Banks have been requesting personal guarantees for loans taken out through the CBILS, Sunak has now taken the decision to ban that requirement.
The government is stopping lenders from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals. The government will continue to cover the first twelve months of interest and fees.
To maximise the support available, the Chancellor is also extending the CBILS so that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time.
Further information on the CBILS can be found here.
In addition to the CBILS, which is aimed a small and medium business, the will be the introduction of the Coronavirus Large Business Interruption Loan Scheme (CLBILS). The scheme will provide a government guarantee of 80% to enable banks to make loans of up to £25 million to firms with an annual turnover of between £45 million and £500 million. This will give banks the confidence to lend to more businesses which are impacted by Coronavirus but which they would not lend to without CLBILS. Loans backed by a guarantee under CLBILS will be offered at commercial rates of interest and further details of the scheme will be announced later this month.
Full details on the announcement can be found on the Government website here.