In the 2020 Budget, the Chancellor announced a new Corona Business Interruption Loan Scheme, which will enable the continued provision of finance to UK businesses during the COVID-19 outbreak. Today, Patrons of the Made in Group have announced their continued support for businesses in the ongoing Coronavirus situation.
The loan will be provided by the British Business Bank through participating providers, such as Lloyds, and will offer more attractive terms for both businesses applying for new facilities and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.
The Government will also cover the first 6 months of interest payments so that businesses will benefit from lower initial repayments. However, the business remains liable for the repayments of the capital. Yesterday, Chancellor Rishi Sunak announced an increase in the maximum value of a facility provided under the scheme will now be £5 million.
The Government also announced that to be eligible for the loan you must:
- Be UK based, with a turnover of no more than £41 million per annum
- Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years
- Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements.
Speaking about the ongoing situation, the bank said, “We’re keen to help protect our small business customers from the impacts of coronavirus, and we’ve therefore introduced a £2 billion package of arrangement fee-free finance to help minimise disruption to your business operation over the coming weeks and months.”
This support package has been designed to help you manage your ongoing cash flow needs caused by supply chain interruptions or employee absences.
The financial support, subject to criteria that is available from the bank includes no arrangement fees for new overdrafts or overdraft limit increases, no arrangement fees for new or increased invoice finance facilities and in certain circumstances, repayment holidays to be provided, to those businesses impacted the most.
Speaking about the range of support on offer, the Lloyds Banking Group released a statement saying that, “We welcome the Chancellor’s announcement this evening, detailing a range of initiatives to support British businesses of all sizes and across all sectors affected by the COVID-19 outbreak. We believe these initiatives will provide both reassurance and vital support to businesses over the coming weeks and months. At Lloyds Banking Group, we are committed to supporting our customers through any interruptions they face and providing additional finance facilities to those businesses that need them.
We will do this by continuing to support large businesses, including helping them access the newly announced Bank of England lending facility and small and medium businesses through the lending we have set aside to support businesses affected by the COVID-19 outbreak and through the Government’s increased Business Interruption Loan Scheme. We stand ready with our own support and that announced by the Government to support our customers in the weeks and months ahead.”
You can read about the full range of support on offer by visiting the Lloyds Banking Group here.