COVID-19 Business Financing Update 3rd April 2020
New Support Measures for Businesses
Rishi Sunak has announced further measures to maximise the support available to businesses by bolstering business interruption loans for small business and creating a new scheme for larger companies.
Coronavirus Business Interruption Loan Scheme (CBILS)
The Chancellor is extending CBILS so that all viable businesses affected by COVID-19, and not just those unable to secure regular financing, will now be eligible should they need to secure financing through this difficult period.
Even more positively, the government will also be instructing banks not to request personal guarantees for loans under £250,000 and is making operational changes to speed up lending approvals.
Under CBILS interest will continue to be covered by the government for the first twelve months.
Coronavirus Large Business Interruption Loan Scheme (CLBILS)
Also announced is new financial support for those businesses that previously fell into the gap created by previous measures, in order to ensure that more firms are able to benefit from government-backed support.
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) will be available to businesses with an annual turnover between £45m and £500m and will provide 80% government backed loans of up to £25m.
Loans backed by the guarantee will be offered at commercial rates of interest, but unlike the small business scheme the government will not cover interest and fees.
Further details on how this scheme will work should be announced later this month.
As ever, your usual points of contact at Rayner Essex are here to discuss the issues with you and assist with exploring the way forward.