An update to the Business Interruption Loan Scheme and the introduction of the new large business scheme
The government have today announced changes to the business interruption loan scheme that was launched last week in response to the Covid-19 crisis. The changes announced should make it easier for a loan to be approved to provide much needed support to business and the scheme has also been extended to include larger businesses.
In a statement, the government said the move is intended to “maximise the support available” and means that all small businesses will now be eligible “should they need finance to keep operating during this difficult time”.
To maximise the support available, the Chancellor is extending the CBILS so that all viable small businesses affected by Covid-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time.
The government has also stopped lenders from requesting personal guarantees for loans under £250,000 and have made operational changes to speed up lending approvals. The government will continue to cover the first twelve months of interest and fees. Despite the £250,000 personal guarantee limit imposed by the Government on loans, we are aware that some banks are offering loans with no personal guarantees
New measure for larger businesses
A new Coronavirus Large Business Interruption Loan Scheme (CLBILS) was also announced for businesses not covered by the original measures. This provides a government guarantee of 80% to banks making loans of up to £25m to businesses with an annual turnover of between £45m and £500m.
Loans backed by the guarantee will be offered at commercial rates of interest, but the government will not cover interest or fees in the same way as the small business scheme. Further details of the CLBILS scheme will be announced later this month.
Import VAT and Duty
Confirmation has been issued by HMRC that whilst all VAT liabilities for the period ended 30th June can be deferred this does not include Import VAT and Duty. This should be paid as normal as there are no time to pay arrangement or deferral reliefs available for any import charges.
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