Business interruption loans for small businesses extended; new scheme for large firms

Chancellor Rishi Sunak today announced new measures to strengthen support on offer for businesses affected by COVID-19 pandemic.

The measures included extending the business interruption loan scheme, launched last week, to benefit more small businesses and announcing a new scheme for larger companies.

All viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible to the government’s Coronavirus Business Interruption Loan Scheme (CBILS).

HM Treasury said over £90 million of loans to nearly 1,000 small and medium sized firms have aleady approved under the scheme.

There have now been over 130,000 enquiries from businesses across the country for business interruption loans, according to latest figures from UK Finance.

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 £1.6 billion has been committed.

The new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will support more firms to benefit from government-backed support. It will provide a government guarantee of 80 percent to enable banks to make loans of up to £25 million to firms with an annual turnover of between £45 million and £500 million.

In another major measure, the government has asked lenders to stop requesting personal guarantees for loans under £250,000, and speed up lending approvals. The government will continue to cover the first 12 months of interest and fees.

“This is a national effort and we’ll continue to work with the financial services sector to ensure that the £330 billion of government support, through loans and guarantees, reaches as many businesses in need as possible,” Chancellor Rishi Sunak said.