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Business: Coronavirus

Treasury written question – answered on 29th June 2020.

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Photo of Drew Hendry Drew Hendry Shadow SNP Spokesperson (Business, Energy and Industrial Strategy)

To ask the Chancellor of the Exchequer, what discussions officials in his Department have had with the retail banking sector on (a) support for business customers who operated unsecured overdraft facilities for pre-planned expenditure and (b) transitioning these customers into alternative lending arrangements where their operations have been affected by the covid-19 outbreak.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Government recognises that the outbreak of COVID-19 may lead to businesses facing financial difficulty and uncertainty. In response, the Government has set out an unprecedented package of support for businesses, including the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), and the Bounce Back Loan Scheme (BBLS).

Under CBILS, borrowers can apply for finance facilities of up to £5 million from 95 accredited lenders. No interest or fees will be charged to the customer during the first 12 months. Under CLBILS, borrowers can apply for finance facilities of up to £200 million (subject to a cap of 25% of turnover). Overdraft facilities are available under both schemes. Bounce Back Loans are also available for the smallest businesses to access finance quickly. Businesses can access loans of up to £50,000, subject to a maximum of 25% of turnover, with no repayments due for the first 12 months. To date, these schemes have provided over £40bn finance to over 970,000 businesses. The Government continues to work with banks and other finance providers to help SMEs access the finance they need.

More broadly, many lenders are also offering support for their customers outside the Government-backed loans schemes, including through for example, repayment holidays and arranging fee-free overdraft extensions.

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