Amendments to the Coronavirus Business Interruption Loan Scheme
Since the introduction of the Coronavirus Business Interruption Loan Scheme (CBILS), there have been over 130,000 enquires from businesses across the UK. However, less than 1,000 businesses have had loans approved under the new Government scheme.
With no restrictions on interest rates, banks were offering CBILS loans with interest rates of up to 30% and demanding personal guarantees from small businesses which led to much criticism of how big banks were applying the scheme.
Responding to the concerns, Chancellor Rishi Sunak announced further amendments to the scheme on Friday 3 April to maximise the support for small businesses and introduced a new scheme for larger companies.
The new amendments are:
- CLBILS will be offered at commercial rates of interest
- Lenders are banned from requesting personal guarantees on loans under £250,000
- Operational changes to speed up lending approvals
- The government will continue to cover the first twelve months of interest and fees
- The introduction of the Coronavirus Large Business Interruption Loan Scheme, enabling banks to offer up to £25m loans for large businesses with turnover between £45m-£500m, not previously eligible under the CBILS.
The chancellor is scheduled to talk with the banks later this week in order to allow more businesses to benefit from the scheme and to ensure “everyone is playing their part”.
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