The Government has announced amendments to the Coronavirus Business Interruption Loan Scheme (CBILS) after claims that banks were forcing companies to provide personal guarantees, and is adding an option for larger companies.
The Chancellor announced that the CBILS programme is being extended, so that all viable small businesses affected by COVID-19, not just those unable to secure regular commercial financing, will now be eligible.
The Government is going to stop lenders requesting personal guarantees for loans under £250,000, and has undertaken to speed up lending approvals. Interest and fees for the first twelve months to be covered by the Government.
Personal guarantees will be limited to 20% for loans over £250,000 of any amount outstanding on the CBILS lending after other recoveries from business assets.
We understand that the new rule will apply to finance already offered under the scheme, to make sure that all business owners receive the same level of protection.
There is also a 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 £25m to firms with an annual turnover of between £45m and £500m. Further details of this scheme are expected later this month.
For more information on these changes, or to discuss a financial rescue or restructuring process to keep trading, please call a member of our team or email firstname.lastname@example.org