Attractive Loan Terms To Support Business
During The Coronavirus Announced
New Scheme expected to become available week commencing 23rd March
The chancellor has announced this week that “Any business who needs access to cash to pay their rent, the salaries, suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms.”
The new scheme is known as “Coronavirus Business Interruption Loan Scheme” (CBILS) will be provided by the British Business Bank through participating providers, will offer more attractive terms for both businesses applying for new facilities and lenders, with the aim of supporting the continued provision of finance to UK businesses during the COVID-19 outbreak.
Mr Sunak said: “The coronavirus pandemic is a public health emergency. But it is also an economic emergency.”
Key Points To Note
- Maximum loan value will be £5 million pounds (Previously £1.2 million.)
- Businesses can access the first six months of that finance interest free, as government will cover the first six months of interest payments.
- The government will provide lenders with a guarantee of 80 per cent on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to small and medium-seized enterprises (SMEs).
- The borrower always remains 100% liable for the debt.
- Almost all business sectors are eligible, however there are a small number of excluded/restricted sectors
How do I apply?
Once the scheme launches next week, it’s expected to be simple to apply and “should take no longer than a standard application.”
The British Business Bank said “any small business interested should, in the first instance, approach one of the 40+ accredited lenders with their borrowing proposal.”
“If the lender can offer finance on normal commercial terms without the need to make use of CBILS, they will do so.”
“Where the small business has a sound borrowing proposal but no, or inadequate security, the lender will consider the small business for support via CBILS.”
This stimulus package from the government is designed to protect businesses impacted by Covid-19, however it may not be suitable for everyone. We’ll be discussing with our clients at our regular monthly meetings and if you are not a client, we are able to offer advice accordingly. Get in touch for more details.