March 30, 2020

From 23 March 2020, businesses can access government support to keep operating in the face of the global economic emergency brought on by coronavirus. Details of two new loan schemes have been confirmed and an information campaign has been launched so that businesses know how to get help.

The Government is providing more than £330 billion of loans and guarantees through the two schemes to help firms continue operating.

For small- and medium-sized businesses, the new Coronavirus Business Interruption Loan Scheme is now available for applications. This scheme will help any viable business with a turnover of up to £45 million to access government-backed finance of up to £5 million. Interest payments and any lender-levied fees for businesses will be covered by the Government for an initial period of up to twelve months.

The Government will provide lenders with a guarantee of 80% on each facility to give lenders further confidence in continuing to provide finance to SMEs. The scheme is available through more than 40 accredited lenders, which are listed on the British Business Bank website.

The Bank of England’s new lending facility for larger firms – the Covid Corporate Financing Facility – is also now open for applications. By purchasing short-term corporate debt, known as commercial paper, the Government says that the scheme provides “a quick and cost-effective way” for companies that are fundamentally strong, but are experiencing severe disruption to cash flows, to raise working capital.

The scheme is open to firms that can demonstrate that they were in sound financial health prior to the impact of Coronavirus. Companies who wish to use the scheme do not need to have issued commercial paper before.

A government information campaign has also been launched to ensure businesses are aware of the support available to them and how to access it. In addition to a new central website, the campaign will use media channels including radio, social media and television to reach businesses eligible for help.

The Government says that further measures will be announced to ensure larger and medium-sized businesses will be able to access the credit they need. To read the Government’s press release in full and for a link to further information, click here.