The UK government announced Friday a series of further measures to help businesses deal with the unfolding economic crisis.
The government is extending the eligibility criteria of its Coronavirus Business Interruption Loan Scheme (CBILS), originally announced on 20 March, to all viable small businesses affected by COVID-19, and not only those unable to secure regular commercial financing.
Crucially, the government, which will continue to cover the first 12 months of interest and fees, is to stop lenders from requesting personal guarantees for loans under £250,000. It also said it was making operational changes to speed up lending approvals.
Additionally, the government has created a new loan scheme for businesses with an annual turnover of between £45 million and £500 million. The Coronavirus Large Business Interruption Loan Scheme (CLBILS) provides a government guarantee of 80% to enable banks to make loans of up to £25 million.
The UK Chancellor of the Exchequer Rishi Sunak said in a press statement: “This is a national effort and we’ll continue to work with the financial services sector to ensure that the £330 billion of government support, through loans and guarantees, reaches as many businesses in need as possible.”
The announcement received support from business groups including the Confederation of British Industry (CBI), the British Chambers of Commerce, and the Federation of Small Businesses (FSB). Mike Cherry, the FSB’s national chair, said in a statement that all viable small businesses negatively impacted by the coronavirus “can now directly access CBILS rather [than] first being offered a bank’s own standard commercial lending product”. He welcomed the removal of personal guarantees for commercial loans below £250,000. “Taking on debt at the current time is a daunting prospect for many small businesses and the self-employed,” he said.
The UK government has set up a hub for coronavirus crisis business advice.
For more news and reporting on the coronavirus and how management accountants can handle challenges related to the outbreak, visit FM’s coronavirus resources page. The Association of International Certified Professional Accountants has resources for CIMA members relating to coronavirus.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.