- The Coronavirus Business Interruption Loan Scheme has been extended so more small businesses can benefit
- A new Coronavirus Large Business Interruption Loan Scheme will support larger businesses not currently eligible for government-backed loans
- Lenders are banned from requesting personal guarantees on loans under £250,000
Chancellor Rishi Sunak has announced further action to support struggling companies by bolstering business interruption loans for small businesses, and announcing a new scheme for larger companies.
The chancellor explained that the Coronavirus Business Interruption Loan Scheme (CBILS) had been extended, so that all small businesses affected by the crisis would now be eligible to receive the government-backed support, and not just those unable to secure a commercial loan from their bank.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) was also introduced, which offers financial support of up to £25 million to larger businesses with an annual revenue of between £45 million and £500 million.
It was also announced that the government will stop lenders from asking businesses to make personal guarantees for loans under £250,000.
“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,” explained the chancellor.
“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.”
Mike Cherry, national chairman of the Federation of Small Businesses, commented: “We welcome the chancellor’s personal intervention to ensure that banks deliver the government-backed emergency loans, which are urgently needed by many small businesses.
“Time and again we’ve heard from members who’ve approached their bank seeking an emergency loan, only to be offered anything but. They were promised interest-free, fee-free, government-backed support from banks but, until now, the process for securing it has proved nightmarish for many.
“Removing the need to be offered standard products first – with an interruption loan as an afterthought – marks a big step forward. So too is ensuring small businesses can qualify for an emergency loan application on the basis of one simple criterion: whether or not you’ve been negatively impacted by the spread of coronavirus is the only question that counts at this juncture.
“Ruling out the need for personal guarantees where smaller loans are concerned is also very welcome. These are business loans being sought at an incredibly difficult time – borrowing should be against business, not personal, assets.”