Updated Friday 10th April

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch this week (w/c 30 March) to support primarily small and medium-sized businesses to access bank lending and overdrafts.

The Government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The Government will not charge businesses or banks for this guarantee, and the scheme will support loans of up to £5 million in value.

Businesses can access the first 12 months of that finance interest free, as the Government will cover the first 12 months of interest payments.

Who is eligible?

You are eligible for the scheme if:

• your business is UK based, with turnover of no more than £45 million per year
• your business meets the other British Business Bank eligibility criteria.

How to access the scheme:

The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

All the major banks will offer the scheme once it has launched. There are 40 accredited providers in all.

You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them.

This will help your finance provider to act quickly once the scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

Update

HM Treasury has announced the Chancellor Rishi Sunak is taking 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.

The Chancellor states:

• £90 million of business interruption loans approved for nearly 1,000 firms and £1.9 billion corporate finance provided to firms hit by COVID-19
• current loan scheme extended so more small businesses can benefit
• lenders banned from requesting personal guarantees on loans under £250,000
• new scheme announced to bolster support for larger firms not currently eligible for loans
• Chancellor emphasises importance of banks moving quickly to support the economy, jobs and businesses

The changes made are after criticism about how the banks were interpreting the scheme and the perceived lack of speed to get loans and overdrafts to businesses.

If you need help securing the finance to keep your business afloat please talk to us about the Government supports available.