Improvements to the Coronavirus Business Interruption Loan Scheme
Rishi Sunak yesterday announced several significant improvements to the Coronavirus Business Interruption Loan Scheme (CBILS).
The CBILS provides loans, overdrafts and invoice and asset finance of up to £5m for up to 6 years. It is eligible to all businesses with a turnover under £45m. The UK government provides a guarantee to the lender of 80% of the value of the loan. These loans are interest free for 12 months. More information can be found here
The scheme previously was only available to applicants that the lender deemed to be unworthy of a normal commercial loan. The new changes ensure that all viable small businesses should now be eligible for the CBILS.
The government has now banned lenders from requesting a personal guarantee in respect of CBILS loans under £250,000. Guarantees on loans over this amount will be limited to 20% of any amount outstanding on the CBILS lending after any other recoveries from business assets.
These changes will apply to loans already granted under the scheme.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) has also been launched yesterday to assist companies with a turnover of more than £45m who do not have investment grade commercial paper, to ensure that more firms will be able to benefit from government-backed support.
Please contact one of the team for any questions you may have.
The annoucement in full Chancellor strengthens support on offer for business as first government-backed loans reach firms in need