By Aisling Finn on Friday 3 April 2020
The new scheme includes businesses with an annual turnover of up to £500m.
Chancellor of the Exchequer Rishi Sunak has answered the calls of many SMEs and industry leaders to overhaul the initial Coronavirus Business Interruption Loan Scheme (CBILS).
The £330bn economic stimulus was announced just over two weeks ago and has already seen a huge overhaul after claims of inefficiency and being too difficult to access.
Sunak announced last night that a new scheme called the Coronavirus Large Business Interruption Loan Scheme (CLBILS) will now include SMEs who feared they wouldn’t get the support they needed in time.
CLBILS extends to cover businesses with an annual turnover between £45m to £500m and will offer loans of up to £25m—the new scheme's predecessor only included businesses with an annual turnover under £45m and only offered loans of up to £5m.
The Government has also announced that it is preventing banks from requiring personal loan guarantees for loans under £250,000 to help speed up the rate of approval.
Sunak, who has been in the role for less than two months, said: "We are making great progress on getting much-needed support out to businesses to help manage their cashflows during this difficult time - with millions of pounds of loans and finance being provided to hundreds of firms across the country.”
"This is a national effort and we'll continue to work with the financial services sector to ensure that the £330 billion of government support, through loans and guarantees, reaches as many businesses in need as possible."
Referring to the new programme, Stephen Jones, CEO of UK Finance, said: “ This was a new scheme delivered at pace and this will always mean there are issues that need to be addressed.”
“Lenders have been working closely with the government since implementation to ensure the scheme can operate in the best way possible to get money to viable businesses that need it. The reforms to the government scheme confirmed by the Chancellor are important changes that should help viable businesses access the help they need,” he added.
It was previously estimated that thousands of UK businesses would run out of cash before Easter so these amendments to the current scheme could be a welcome breath of fresh air for those struggling due to disruption caused by coronavirus.
Despite these reforms, the extension is still is yet to fix other concerns from the industry.
Just last week it was noted that the inefficiency of the scheme could mean companies could fold before the money even reaches them and that many at-risk companies are still excluded such as SME house-builders and developers of vital buildings such as care homes, hospitals and affordable housing.
Similarly, last week the Association of Alternative Business Finance wrote to Sunak calling on the government to open up the scheme to alternative lenders, a move the Chancellor is yet to make.