Coronavirus Business Interruption Loan Scheme
The Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will enable businesses to apply for a loan of up to £5 million, with the government covering up to 80% of any losses with no fees.
Businesses can access the 12 months of that finance interest free, as government will cover the first 12 months of interest payments.
The Coronavirus Business Interruption Loan Scheme webpage is the best source of the latest information.
You should apply via your lender’s website or through one of the 40 accredited finance providers offering the scheme. The lender has the authority to decide whether to offer you finance.
The government is also 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.
Coronavirus Large Business Interruption Loan Scheme
The new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will provide a government guarantee of 80% to enable banks to make loans of up to £25m to firms with an annual turnover of between £45m and £500m. This will give banks the confidence to lend to many more businesses which are impacted by coronavirus. Facilities backed by a guarantee under CLBILS will be offered at commercial rates of interest.
We expect the scheme to be delivered through commercial lenders. The Government will provide lenders with an 80% guarantee on individual loans for businesses that would be otherwise unable to access the finance they need
Lenders will still be expected to conduct their usual credit risk checks, but this scheme allows them to specifically support business that were viable before the COVID-19 outbreak but are facing significant cash flow difficulties, that would otherwise make their business unviable in the short term.
The new scheme will launch later this month and will support a wide range of businesses to access finance products including short term loans, overdrafts, invoice finance and asset finance. See more here.
Businesses would remain responsible for repaying any facility they may takeout.
As well as loans, there are many other types of finance supported by the programme, depending on the provider. You can find out what type of finance they provide on the British Bank partner page.