Important changes to the Coronavirus Business Interruption Loan Scheme

Posted on 3rd April 2020 by Streets


Image to represent Important changes to the Coronavirus Business Interruption Loan Scheme

The Chancellor has announced that the Coronavirus Business Interruption Loan Scheme (CBILS) will be extended to small businesses and is introducing a new loan scheme for businesses with revenue up to £500million.


In addition to this, the Treasury has also announced it was going to ban lenders from requesting personal guarantees for loans under £250,000 and it was looking to make operational changes to speed up the lending approvals, after receiving much criticism of how the scheme has been administered to date.

Under the CBILS, businesses with a turnover up to £45m can apply for a loan of up to £5m.

The scheme is run by high street banks such as RBS, HSBC, Lloyds and Barclays, with the government promising to cover 80 per cent of the loans they write.

The government is also covering the first 12 months of interest and fees.

The scheme has created much debate with criticism that some banks have declined applications on the basis they were not eligible and asked them to sign up to regular loan products instead and also that some banks have been charging high rates of interest and seeking personal guarantees from directors.

A further critical concern was that there are fears the money would not reach businesses fast enough, leading to many businesses simply not being able to survive any longer.

The announcement that the Treasury is planning a new loan scheme for businesses with revenue between £45m and £500m is also welcomed news, following concerns that medium-sized businesses were missing out, as they were too large to apply for the loan scheme and too small to take advantage of a government debt-buying programme for larger companies.

The new coronavirus large business interruption loan scheme will provide a government guarantee of 80 per cent to enable banks to make loans of up to £25m to businesses with an annual turnover of between £45m and £500m.

This announcement is encouraging news for many businesses with these important changes now helping to ensure that businesses can access the help they need.

 


No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.

Information

The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.


Expert insight and news straight
to your inbox

Related Articles


Welcome to our new merged practice Streets Andrew Wright in Wakefield!

We are delighted to announce the establishment of Streets Andrew Wright Chartered Accountants. The announcement follows the merger of the Wakefield practice, Andrew Wright & Co with ourselves.When asked about the merger, Sally Wright, Managing Director, said: “Fellow Director Richard Farndale and I are delighted and excited about the ...


Golf Day Secures Hole in One for Air Ambulance

We hosted our 11th annual charity golf day earlier this month raising a record amount of more than £7,500 for the Air Ambulance. The total amount fundraised will be divided between our three regional charities; East Anglian Air Ambulance, Lincolnshire and Nottinghamshire Air Ambulance and Yorkshire Air Ambulance.The winning ...


Ordering documents from Companies House

Companies House offers interested parties the ability to order certified copies of certificates and documents held on the Companies House register. You can order: a company certificate with certified facts; or a certified copy of a document held


You might also be interested in...