The UK government’s loan scheme to help smaller businesses hit by COVID-19 disruption, announced in the Budget earlier this month, goes live today.
The loans are available to businesses based in the UK which have turnover of £45m or less.
Provided by the state-run British Business Bank through 40 accredited lenders, loans of up to £5m are now available to businesses experiencing virus-related cash flow problems.
The Coronavirus Business Interruption Loan Scheme provides a range of products, including loans, overdrafts, invoice finance and asset finance facilities.
“Money will start to flow [to businesses] this week,” Keith Morgan, chief executive of BBB, told BBC Radio 4’s Today programme this morning.
“Available from today, we hope this new scheme will enable lenders to provide the finance smaller UK businesses need, alongside other government measures, to help them survive the current economic disruption.”
Borrowers will remain liable to repay the full amount of any loan, repayable in periods of up to six years.
Included in lenders’ eligibility criteria is “how viable the loan proposal would be without virus disruption,” Morgan told the BBC.
Loans of up to £250,000 can be made available unsecured.
“The scheme is designed to share risk with the government…so [for instance] a borrower will not have to put up their primary residence as security,” Morgan said today.
The British Business Bank was set up in 2014 by Vince Cable, then business secretary, to supply a line of credit to firms that struggle to secure financing through other means.
Scheme details key points:
· Up to £5m available, repayable in terms of up to six years
· Loans made by accredited lenders are 80% guaranteed by the government
· No fee for small businesses
· Government to pay interest and fees for loans up to 12 months
· Borrower liable to repay 100% of debt.
For more details and to apply for a Coronavirus Business Interruption Loan Scheme, see here:
