Chancellor Rishi Sunak has today announced changes to the Coronavirus Business Interruption Loan Scheme. ADS has requested improvements to the scheme to make it more accessible for a larger number of businesses.
The changes announced today include:
- Extending the scheme so that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible.
- 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.
- For loans over £250,000, personal guarantees will be limited to just 20% of any amount outstanding on the loan after any other recoveries from business assets. Lenders have already been prohibited from asking business owners to use their home as a personal guarantee.
In addition, the Government is launching the new Coronavirus Large Business Interruption Loan Scheme (CLBILS) which will provide a government guarantee of 80% to enable banks to make loans of up to £25 million to firms with an annual turnover of between £45 million and £500 million. Further details will be available later in April.