The Government is also stopping lenders from requesting personal guarantees for loans of under £250,000 and making operational changes to speed up lending approvals. The Government will continue to cover the first twelve months' interest and fees. For loans over £250,000, personal guarantees will be limited to just 20% of any amount outstanding on the CBILS lending after any other recoveries from business assets. Lenders were already prohibited from asking business owners to put their house up as security. The changes to the scheme aim to provide further reassurance regarding personal assets. This will apply to finance already offered under the scheme, to ensure that all business owners receive the same level of government protection.
For further details on this loan scheme can be found at HM Government Business Support.
The new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will provide a government guarantee of 80% to enable banks to make loans of up to £25 million to firms with an annual turnover of between £45 million and £500 million. The aim is to give banks the confidence to lend to more businesses impacted by coronavirus but which they would not lend to without CLBILS. Loans backed by a guarantee under CLBILS will be offered at commercial rates of interest and further details of the scheme will be announced later this month.
