Financing of UK SMEs under the Coronavirus Business Interruption Loan Scheme (CBILS) is to become available in the week commencing 23 March, the British Business Bank (BBB) has confirmed.
Earlier, Rishi Sunak, the Chancellor of the Exchequer, said in his Covid-19 announcement: “I am extending the new Business Interruption Loan Scheme I announced at the Budget last week so that, rather than loans of £1.2m, it will now provide loans of up to £5m, with no interest due for the first six months.”
During his Budget speech on 11 March, the chancellor said that the CBILS would temporarily replace the Bank’s Enterprise Finance Guarantee (EFG) scheme with an additional £1bn being made available on top of existing support offered through the programme.
The scheme provides an approved lender with a government-backed guarantee against the outstanding facility balance. Funding under the scheme includes asset finance and invoice finance.
Sunak said: “The government will offer a generous guarantee on those loans, covering up to 80% of losses, with no fees, so that banks can lend with confidence.
“This will unlock up to £1bn of attractive working capital loans to support small businesses, with more as needed.”
In a statement, the British Business Bank said: We will be working closely with our current EFG delivery partners and government to implement the package of enhancements so that the new scheme is available in the coming weeks.”
Since its launch in 2009, EFG has supported the provision of about 32,000 business facilities to a value of over £3.3bn, as at end of June 2019, the BBB said.
The CBILS also funds term facilities and overdrafts.