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COVID-19: Coronavirus Business Interruption Loan Scheme (CBILS) Announced

The Chancellor of the Exchequer has strengthened the support on offer for business, as the first government-backed loans reach firms in need. He is taking further action to support firms affected by the coronavirus crisis by bolstering business interruption loans for small businesses, and announcing a new scheme for larger companies.

What is the scheme?

The Chancellor has stated that:

  • £90 million of business interruption loans have been approved for nearly 1,000 firms, and £1.9 billion of corporate finance has been provided to firms hit by COVID-19
  • the current loan scheme has been extended so more small businesses can benefit
  • the lenders are banned from requesting personal guarantees on loans under £250,000
  • the new scheme announced will bolster support for larger firms not currently eligible for loans
  • the Chancellor emphasises importance of banks moving quickly to support the economy, jobs and businesses

The changes have been made after criticism about how the banks were interpreting the scheme and the perceived lack of speed to get loans and overdrafts to businesses.

To maximise the support available, the Chancellor is extending the CBILS so that all viable small businesses that have been affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time.

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

More than £90 million of loans to nearly 1,000 small and medium sized firms have been approved under the government’s Coronavirus Business Interruption Loan Scheme (CBILS) since its launch last week. 

The Coronavirus Large Business Interruption Loan Scheme (CLBILS)

A government-backed scheme to provide financing to larger companies, being operated by the Bank of England, has also provided almost £1.9 billion of support to firms and a further £1.6 billion has been committed.

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) will provide a government guarantee of 80% to enable banks to make loans of up to £25 million to firms with an annual turnover of between £45 million and £500 million.

This 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.

Find out more on the GOV.UK website. If you need help securing the finance to keep your business afloat, you can alternatively talk to us about the Government supports available.

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