<-- Back to proposed bills
Business Update
13 May 2020
Type
Written Ministerial Statement
Department
Department for Business, Energy and Industrial Strategy
At a Glance
Issue Summary
The statement addresses changes made to the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS) to provide more businesses with access to finance during the coronavirus outbreak.
Action Requested
The government has removed the requirement for personal guarantees on CBILS loans under £250,000, revised the terms of loss recovery in case of default, and relaxed eligibility criteria to include businesses that can secure loans on commercial terms. Additionally, the portfolio cap on gross Government liability has been lifted, and the forward-looking element of the viability test has been removed to speed up lending decisions. Charities and Further Education colleges no longer need to show at least 50% of their income comes from trading to access support.
Key Facts
- The Coronavirus Business Interruption Loan Scheme was launched on 23 March.
- Lenders can offer loans of up to £5 million under CBILS for businesses with a turnover up to £45 million affected by the coronavirus outbreak.
- The Coronavirus Large Business Interruption Loan Scheme was launched on 20 April and offers loans up to £50 million for viable businesses with a turnover of £45 million and above.
- Personal guarantees are not required for CBILS loans under £250,000.
- For CBILS loans over £250,000, lenders may only look to the personal guarantee for 20% of the remaining debt before claiming 80% of the residual loss under the guarantee agreement.
- The cap on gross Government liability at the level of the lender’s whole CBILS portfolio has been removed.
- Charities and Further Education colleges no longer need to show at least 50% of their income comes from trading to access both CBILS and CLBILS loans.
▸
Assessment & feedback
Summary accuracy