The government’s COVID-19 small business loan scheme announced in the Budget, is now live.
This means loans are now available to UK businesses which have turnover of £45m or under.
Businesses with virus-related cash-flow issues can apply for loans of up to £5 million through the British Business Bank via 40 accredited lenders.
Keith Morgan, the state-run bank’s chief executive, told the BBC’s Radio Four programme: “Money will start to flow this week . . . we hope this new scheme will enable lenders to provide the finance smaller UK businesses need, alongside other government measures, to help them survive.”
SMEs who take advantage of the scheme, will have up to six years to repay loans and those of up to £250,000 can be made available unsecured.
The scheme, which will be demand-led, will give the lender a government-backed guarantee against the outstanding facility balance while the government will also cover the first six months of interest payments.
It is unclear the extent to which fintechs and startups will take advantage of the CBILS, which has been criticised in some quarters.
International consultancy Fideres was quoted in CityAM as describing the scheme as “not fit for purpose”, arguing that it was not straightforward as it leaves individual banks to determine which businesses can obtain a loan on standard commercial terms.
But the British Chambers of Commerce called the initiative a “crucial step”.
Full details here
Related stories: