Coronavirus – Loans Guaranteed By The Government For Small Businesses ( Coronavirus Business Interruption Loan Scheme)
Businesses can apply to their business bank, or one of the 40 lenders, who are included in the scheme. The loans can be bank loans, including invoice discounting and factoring loans. If a bank rejects a loan application, a further loan application can be made with one of the other 40 lenders.
The principal terms of the loans are as follows:
- 80% of the value of the loan will be guaranteed by the Government.
- The remainder of loan may require guarantees, or some other form of security, from the management or owners of the company taking out the loan. The government has however announced that for loans of £250,000 or less, no personal guarantees will be required by shareholders / directors.
- Any interest on the loan will be paid by the Government for the first 12 months of the loan.
- The maximum value of a loan under the scheme is £5 million.
- The loans can be up to 6 years in length.
We understand the banks are likely to lend to businesses which were viable before the onset of the impact of the coronavirus.