Rishi Sunak has taken further action to support firms affected by Coronavirus. He has revised the Coronavirus Business Interruption Loan Scheme (CBILS) and announced a new scheme for larger companies. The expanded CBILS will be offered by lenders from Friday 3 April 2020 and operational from Monday 6 April 2020.
Friday, 3 April, Chancellor of the Exchequer, Rishi Sunak MP, said :
“We are making great progress on getting much-needed support out to businesses to help manage their cashflows during this difficult time – with millions of pounds of loans and finance being provided to hundreds of firms across the country.”
“And now I am taking further action by extending our generous loan scheme so even more businesses can benefit. We have also listened to the concerns of some larger businesses affected by COVID-19 and are announcing new support so they can benefit too.”
“This is a national effort and we’ll continue to work with the financial services sector to ensure that the £330 billion of government support, through loans and guarantees, reaches as many businesses in need as possible.”
The reason behind the extension in Coronavirus Business Interruption Loan Scheme
The Chancellor has extended the scheme in response to feedback received since the scheme’s launch. All viable small businesses affected by Covid-19, and not just those unable to secure regular commercial financing will now be eligible. This change will enable all long-term viable businesses experiencing difficulties as a result of the coronavirus outbreak to access finance.
40 accredited lenders(including all the major banks) will offer the scheme.
We expect the scheme to run for an initial period of 6 months. There is no limit on the capacity of the scheme.
Which businesses are eligible for CBILS?
To be eligible for a facility under CBILS, your business must:
- Be UK-based in its business activity
- Have an annual turnover of no more than £45 million
- Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic
- Self-certify that it has been adversely impacted by the coronavirus (COVID-19).
Full details of eligibility and an FAQ link to the British Business Bank can be found here.
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Businesses from any sector can apply, except the following:
- Banks and building societies
- Insurers and reinsurers (but not insurance brokers)
- Public-sector organisations, including state-funded primary and secondary schools
Facilities supported by the guarantee will be provided by participating commercial lenders. Businesses should check the British Business Bank website to find out which lenders can provide the type of finance they are looking for. They should then approach a lender or lenders as they would normally. Individual lending decisions are at the discretion of these accredited lenders. The businesses will remain responsible for repaying any facility that they take out.
Businesses with a turnover above £45m may be entitled to other government support. More information about these schemes is available here.
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How do I access the Coronavirus Business Interruption Loan Scheme?
The scheme is accessible through businesses’ normal points of contact with lenders. If businesses have concerns about their finances, they should contact their lender for support as early as possible.
Securing lending below £250,000 do not require personal guarantees. For any borrowing above £250,000, personal guarantees will be capped at 20% of the outstanding value of the loan, as the Government is providing the guarantee for the remaining 80% of the finance. This will apply to all customers that have secured a loan under CBILS since its launch on 23rd March.
Given the high volumes of calls that all banks are receiving at the moment, including from vulnerable customers requiring immediate support, businesses may want to contact their lender online first. Lenders’ dedicated Covid-19 support pages will provide further information.
Businesses do not need to contact the British Business Bank to access this scheme. However, they may find some of the British Business Bank’s information on the scheme useful.
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When can I access the scheme?
The Coronavirus Business Interruption Loan Scheme (CBILS) is available now. Banks are experiencing a significant number of calls, including from vulnerable customers. While it will be much quicker for businesses to check the guidance online to identify the best way to access the scheme.
While lenders are enthusiastic about providing access to the scheme for businesses. Some lenders may take a few more days to ensure the deployment of the scheme through their channels. Firms are working as quickly as they can to ensure businesses can access the support they need.
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