Chancellor Makes Changes to Business Interruption Loan Scheme
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.