Chancellor Rishi Sunak is taking further action to support firms affected by coronavirus by bolstering business interruption loans and announcing a new scheme for larger companies.
More than £90 million of loans to nearly 1,000 small and medium-sized firms have been approved under the government’s Coronavirus Business Interruption Loan Scheme (CBILS) since its launch last week.
And 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.
To maximise the support available, the Chancellor is extending the CBILS so that all viable small businesses affected by Covid-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time.
The government is also stopping lenders from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals. The government will continue to cover the first twelve months of interest and fees.
‘This is a national effort and we’ll continue to work with the financial services sector’
The Chancellor said: “We are making great progress on getting much-needed support out to businesses to help manage their cashflows during this difficult time, with millions of pounds of loans and finance being provided to hundreds of firms across the country.
“And now I am taking further action by extending our generous loan scheme so even more businesses can benefit. We have also listened to the concerns of some larger businesses affected by Covid-19 and are announcing new support so they can benefit too.
“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.”
Emma McClarkin, chief executive of the British Beer and Pub Association, said: “We welcome the Chancellor’s statement today, bolstering credit lines to businesses affected by the Covid-19 crisis.
“The all-important detail on the support remains to be seen, but if done right it should help out those businesses in the ‘squeezed middle’. The majority of our membership falls into this bracket and so haven’t had access to the support that the government intended.
“It is a shame that the loans will be at commercial rates, meaning successful businesses, through no fault of their own, will be forced to get into more debt due to this crisis. Nonetheless, it is imperative now that the banks take heed of this clear direction from government and get the cash to businesses as fast as possible, ensuring the great British pub industry survives this crisis and is in the best position to reopen in the future.”