London, UK: Monday saw two further schemes from the government to help business deal with the coronavirus outbreak: a new interest-free Business Interruption Loan Scheme for small and medium-sized firms and a Bank of England finance option for bigger businesses.
UK-based small and medium-sized businesses (SMEs) with an annual turnover of less than £45m can apply for an interest-free loan of up to £5m to help them through Covid-19 related difficulties.
The government will provide a grant payment to cover the interest and initial fees for the first 12 months, and will guarantee 80% of the loan amount to give banks and financial companies the confidence to lend.
Under the scheme, which will initially run for six months, businesses will be able to borrow for up to six years. They will be liable to repay the money in full – the guarantee is for the lenders, not the borrowers.
Not all small and medium sized firms be able to borrow money. Firms will have to prove that they are viable businesses which have been trading successfully, but just need extra support to deal with short term difficulties caused by the current disruption. Some firms may not be successful.
The money will be provided by more than 40 lenders who have signed up to the scheme, including high street banks such as Barclays, HSBC, Lloyds and Nat West as well as more specialist finance companies.
Businesses are asked to contact their own bank first (if they are taking part in the scheme) via the company website if possible, and only approach other lenders if they need to.
The British Business Bank which is running the scheme told the BBC on 23 March that it expected money to start flowing “this week”.
Detals of how are available on a PDF from the British Bank.
There is also an overview of help available here.
