Monday, 23 March, 2020
Businesses across the UK are now able to access government support to keep operating in the face of the global economic emergency brought on by coronavirus.
The Government has confirmed details of two new loan schemes to enable UK businesses to continue trading and manage their cash flows during the national coronavirus emergency. More than £330 billion of loans and guarantees will be available.
For small and medium-sized businesses, the new Coronavirus Business Interruption Loan Scheme will help any viable SME with a turnover of up to £45 million to access government-backed loan finance of up to £5 million. Interest payments and any lender-levied fees for businesses will be covered by the Government for an initial period of up to twelve months.
The government will provide lenders with a guarantee of 80% on each facility to give lenders further confidence in continuing to provide finance to SMEs. The scheme is available through more than 40 accredited lenders, which are listed on the British Business Bank website.
The Bank of England's new lending facility for larger firms – the Covid Corporate Financing Facility – is also open to applications. By purchasing short-term corporate debt – known as commercial paper – the scheme provides a quick and cost-effective way to raise working capital for companies that are fundamentally strong but are experiencing severe disruption to cash flows, helping to pay wages and suppliers.
The scheme is open to firms that can demonstrate that they were in sound financial health prior to the impact of coronavirus. Companies wishing to use the scheme do not need to have issued commercial paper before.
The Chancellor of the Exchequer, Rishi Sunak, said:
'We are working round the clock to do whatever it takes to protect our people and businesses.
'That means that we are not only taking unprecedented action but doing so at unprecedented speed, because we know that businesses and their employees need help now.'
Business Secretary, Alok Sharma, said:
'We know that businesses are in urgent need of access to funding during these unprecedented times.
'The Business Interruption Loan Scheme will make it easier for banks to lend and businesses to borrow. This will ensure that credit keeps flowing to where it is needed, when it is needed.'