UPDATED ON 17 APRIL AT 11:38
A new Coronavirus Business Interruption Loan Scheme has launched to support businesses to access bank lending and overdrafts.
The temporary Coronavirus Business Interruption Loan Scheme will support small and medium-sized businesses with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to six years.
The Government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The scheme will be delivered through commercial lenders, backed by the Government-owned British Business Bank.
There are 40 accredited lenders able to offer the scheme, including all the major banks.
It was announced on 3 April that the government is stopping lenders from requesting personal guarantees for loans under £250,000.
Am I eligible?
You are eligible for the scheme if:
- your business is UK based, with turnover of no more than £45 million per year
- your business meets the other British Business Bank eligibility criteria
How do I access it?
To apply, you should talk to your bank or one of the 40 accredited finance providers offering the scheme (and not the British Business Bank) as soon as possible to discuss your business plan with them.
You can find out the latest on the best ways to contact them via their websites. Please note that branches may currently be shut down to enable social distancing.
The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website.
If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
The new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will ensure that more firms are able to benefit from government-backed support during this difficult time.
- All viable businesses with turnover of more than £45m will be able to apply for government-backed support
- Firms with turnover of more than £250 million can borrow up to £50 million from lenders
- This complements existing support including the Covid Corporate Financing Facility and the Coronavirus Business Interruption Loan Scheme
The scheme will be available through a series of accredited lenders, which will be listed on the British Business Bank website.