Chancellor announces further support for UK businesses amid coronavirus pandemic
Chancellor Rishi Sunak has announced further action to support firms affected by the coronavirus crisis by bolstering business interruption loans for small businesses and announcing a new scheme for larger companies.
To maximise the support available, the Chancellor is 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
The government is also 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.
The new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will ensure that more firms are able to benefit from government-backed support during this difficult time.
It 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 £45m and £500m.
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.
More than £90m of loans to nearly 1,000 small and medium-sized firms have been approved under the government’s Coronavirus Business Interruption Loan Scheme (CBILS) since its launch last week.
A government-backed scheme to provide financing to larger companies, being operated by the Bank of England, has also provided almost £1.9 billion of support to firms and a further £1.6bn has been committed.
Chancellor of the Exchequer, Rishi Sunak MP, said that the government is making “great progress” on getting much-needed support out to businesses to help manage their cash flows.
He added: “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.”
The Chancellor will also be speaking to bank chief executives next week to discuss how the schemes are working and ensure everybody is playing their part.
There have now been over 130,000 enquiries from businesses across the country for business interruption loans, according to latest figures from UK Finance.
Some 983 businesses have had finance approved, while banks are processing thousands of loan applications – and scheme changes made today will help them approve loans for the smallest businesses as quickly as possible.
Dr Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, commented on the announcement, she said: “This is a much needed boost to the financial package available to Scottish businesses. We asked the Chancellor for a rethink to the Coronavirus Business Interruption Loan Scheme (CBILS) and he has listened.
“There were gaps, particularly for small and medium-sized companies in the original package. Our message remains the same: Get the cash out the door fast – businesses cannot afford to wait if we are to survive. This is about saving jobs and the livelihoods of millions of employees across all sectors throughout Scotland.”
Dr Adam Marshall, director of the British Chambers of Commerce, added: “We’re pleased that the Chancellor is listening and responding to the real-world concerns of firms across the UK who are urgently trying to access financial support.
“Improvements to the Coronavirus Business Interruption Loan scheme will help firms get access to cash more quickly, and the announcement of a new loan scheme for mid-sized companies closes a significant gap in existing support.
“Chambers of Commerce will continue to work with government and the banks to ensure that support reaches businesses at the front line.”
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