How do I apply for a Coronavirus Business Interruption Loan?
UPDATED: The government has announced a new temporary Coronavirus Business Interruption Loan scheme, as part of a package of measures to help small business.
British Business Bank will deliver the loan scheme, which will launch within the next few weeks to support SMEs to access bank lending and overdrafts. Interest rates will be similar to current bank lending.
The government will provide lenders with a guarantee of 80 per cent of each loan – subject to a per-lender cap on the number of bad loans it can claim for.
>See also: Coronavirus government statutory sick pay – how to apply for it
The scheme will support loans of up to £1.2m per small business. This new guarantee, which replaces the existing £500m Enterprise Finance Guarantee (EFG), will initially support up to £1.2bn of lending.
Like the EFG, the idea is to give lenders more confidence in approving credit decisions for small businesses that have insufficient security to meet the lender’s normal requirements. More than 40 lenders including the big four banks — Barclays, HSBC, Lloyds and RBS — provide funds under the scheme as either loans, overdrafts or asset-based lending secured on equipment or invoices.
However, the Coronavirus Business Interruption Loan will offer more attractive terms for both small business and lenders than the EFG.
Lenders will not charge small businesses or banks for this guarantee. And the government will waive the 2 per cent it charges borrowers annually for the EFG guarantee.
However, the small business borrower will always remain 100-per-cent liable for the debt.
Treasury says more details will be made available next week.
This page will be continually updated as more information from British Business Bank becomes available.
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