Coronavirus Business Interruption Loan Scheme

Department for Business, Energy and Industrial Strategy written question – answered on 21st May 2020.

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Photo of Vicky Foxcroft Vicky Foxcroft Shadow Minister (Work and Pensions)

To ask the Secretary of State for Business, Energy and Industrial Strategy, what recent steps the Government has taken to ensure that banks provide loans under the Coronavirus Business Interruption Loan Scheme.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

The Coronavirus Business Interruption Loan Scheme (CBILS) is part of a comprehensive package of measures designed to support businesses facing difficulties in this period.

Accredited lenders are responsible for providing loans under the CBILS. Decision-making on whether a business is eligible to access the CBILS is fully delegated to the accredited lenders, and individual lending decisions remain at the discretion of these lenders.

Since the CBILS launched, Government has listened to feedback from stakeholders and made changes to ensure that loans are processed as quickly as possible. These changes include:

  • Extending the scheme so that all viable small businesses affected by Covid-19 are eligible;
  • Removing previous restrictions on the following groups to enable them to access the CBILS, subject to other eligibility criteria being met: Employer, professional, religious or political membership organisations and trade unions;
  • Removing the ability for lenders to ask for personal guarantees for loans under £250,000, and reducing the personal guarantee for loans over £250,000 to 20% of the outstanding balance after recoveries;
  • Introducing technical changes to ensure that applications will be processed faster;
  • Removing the forward-looking viability test; and
  • Removing the per lender portfolio cap.

The Government continues to work with banks and other finance providers to help SMEs access the finance they need.

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