Pressure from business groups and the press for the Chancellor to make his CBILS more readily available to affected UK businesses seems to have been heard.
At 12.15am this morning (3 April 2020) various changes in the existing offering were announced together with an extension of the scheme to larger companies previously excluded.
A summary of the changes are set out below:
- Banks are reported to be offering small businesses that meet their existing lending criteria overdraft and loans outside the CBILS loan arrangements.
- Banks are now instructed to offer all businesses – even those who qualify for regular bank loans and overdrafts – a CBILS arrangement. This means that banks are banned from requesting personal guarantees from lenders for loans under £250,000.
- For loans over £250,000 personal guarantees will be limited to 20% of any amount outstanding on the CBILS lending after any other amounts have been recovered from business assets.
- The above two changes will apply to CBILS loans already obtained prior to the 3 April announcement.
- Government has also requested that applications are dealt with quickly.
- A new Coronavirus Large Business Interruption Loan Scheme (CLBILS) is to be made available to enable banks to make loans under the scheme of up to £25m (the present limit for the smaller scheme is £5m). This will allow firms with an annual turnover of between £45m and £500m access to the 80% government guarantee.
- Government is actively requesting that banks keep interest rates to “a reasonable level”. After all, base rates are at a record low…
Readers are reminded that banks will no doubt continue to require updated accounts and management information to support a CBILS application. If you are considering a loan please contact us so that we can help you draw together the information required.
- Covid 19 Furloughing Fact-sheet for Employers
- Covid 19 Financial Support Fact-sheet Self Employed & Partnerships
- Covid 19 Financial Support Fact-sheet Limited Company Directors
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