Government extends loan scheme to larger companies

By Stefan Chomka contact

- Last updated on GMT

Government extends loan scheme to larger companies

Related tags: Coronavirus, Restaurant

The Government has announced it is extending the Coronavirus Business Interruption Loan Scheme (CBILS) it launched last week to larger businesses in a bid to help as many affected by Coronavirus as possible.

A newly-created Coronavirus Large Business Interruption Loan Scheme (CLBILS) has been created that will provide a Government guarantee of 80% to enable banks to make loans of up to £25 million to companies with an annual turnover of between £45 million and £500 million.

This move, it says, will give banks the confidence to lend to more businesses which are impacted by coronavirus but which they would not lend to without CLBILS.

Loans backed by a guarantee under CLBILS will be offered at commercial rates of interest and further details of the scheme will be announced later this month.

The move has, however, been met with disappointment from London Union’s Jonathan Downey, who has been a driving force for Government action for hospitality businesses and jobs, and who says its impact “won’t make much difference”.

“Apart from lifting the [turnover/maximum loan] limits, which will work well for some long-established, well-resourced and successful operators, almost all of the tiny tweaks to the CBILS are political not practical, and so they won't make much difference,” he says.

“It may look easier to get a loan now but if a business isn't viable, it's unlikely to take on more debt anyway. Why would you? What this confirms is that debt is not the answer.”

“We need cash grants, a nine-month National Rent Free [policy] and an insurance solution.”

The government is also stopping lenders from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals. It says it will continue to cover the first 12 months of interest and fees.

It says the CLBILS will ensure that more companies are able to benefit from government-backed support during.

“We have also listened to the concerns of some larger businesses affected by COVID-19 and are announcing new support so they can benefit too,” says Chancellor of the Exchequer, Rishi Sunak.

According to the Government, more than £90 million of loans to nearly 1,000 small and medium sized firms have been approved under its CBILS since its launch last week.

 

 

 

Related topics: Business

Related news

Show more

Spotlight

Follow us

Hospitality Guides

View more

Featured Suppliers

All suppliers