Coronavirus: Treasury announces further Covid-19 support for firms
PUBLISHED: 07:25 03 April 2020 | UPDATED: 07:25 03 April 2020
More businesses will be able to access financial support during the coronavirus lockdown after the chancellor announced a wider package of measures to assist struggling companies.
The move will enable larger firms with turnovers as high as £500m to access support, while opening up the availability of state-backed cash to smaller businesses.
And the Treasury has confirmed the imposition of new rules on lenders in a bid to ensure money gets to business owners faster and with less personal risk involved.
The Treasury has confirmed:
• The introduction of a new Coronavirus Large Business Interruption Loan Scheme (CLBILS) providing a government guarantee of 80pc to enable loans of up to £25m for firms with an annual turnover of between £45m and £500m.
• A ban on banks being able to demand debt-risking personal guarantees on loans of less than £250,000 to speed up the process of lending and reduce financial risk for applicants.
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• An expansion of the already-running Coronavirus Business Interruption Loan Scheme (CBILS) to allow “viable” small businesses affected by Covid-19 to apply, no longer limiting it to those unable to secure commercial financing.
• More than £90m has been paid to 983 small and medium sized businesses, with £1.9bn now in the accounts of larger firms.
• Chancellor Rishi Sunak will meet with chief executives of UK banks to discuss the implementation of the schemes next week.
Mr Sunak said: “We are making great progress on getting much-needed support out to businesses to help manage their cash flows during this difficult time – with millions of pounds of loans and finance being provided to hundreds of firms across the country.
“And now I am taking further action by extending our generous loan scheme so even more businesses can benefit.
“We have also listened to the concerns of some larger businesses affected by Covid-19 and are announcing new support so they can benefit too.
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“This is a national effort and we’ll continue to work with the financial services sector to ensure that the £330bn of government support, through loans and guarantees, reaches as many businesses in need as possible.”
More than £90m of loans to nearly 1,000 small and medium sized firms have been approved under CBILS since its creation last week, the Treasury confirmed.
It comes after business secretary Alok Sharma this week warned banks it would be “completely unacceptable” if they were found to be “unfairly refusing funds to good business in financial difficulty”, especially following the taxpayer-funded 2008 bailouts after the financial crash.
The Government has now introduced measures to ensure financial support is readily available, including for larger businesses.
Mr Sharma said: “The changes we are making to the Coronavirus Business Interruption Loan Scheme will make it easier for business to access the lending we have put in place, helping them to continue trading and protect the livelihoods of their staff.”