Coronavirus Business Interuption Loan Scheme (CBIL)

InA

From the BBC:

https://www.bbc.co.uk/news/uk-england-tyne-52143673

The government has pledged to guarantee £330bn of loans but only £145m has been lent so far.

Small firms say they have struggled with onerous eligibility criteria for the government-backed loans, which are being issued by High Street banks and other lenders.

They have also complained of facing interest rates of up to 30% and being asked to make unreasonable personal guarantees.

Mr Sunak said that under changes to the Coronavirus Business Interuption Loan Scheme (CBILS):

• Applications will not be limited to businesses that have been refused a loan on commercial terms, extending the number who benefit. However, the Treasury has not capped the interest rates banks can charge.
• Banks will be banned from asking company owners to guarantee loans with their own savings or property when borrowing up to £250,000
• Larger firms with a turnover of up to £500m will also be eligible for more help - with state-backed loans of up to £25m available to firms with revenues of between £45m-500m.

There has been widespread concern, acknowledged by the government, that some of the emergency measures to provide financial assistance to businesses are not working.

Too few firms felt able or willing to take on loans that carried an 80% government guarantee to the lender but not the borrower. The Treasury has announced new rules, meaning business owners asking to borrow less than £250,000 will no longer have to offer up personal guarantees.

Perhaps most importantly, the requirement for companies to have first tried to get a normal commercial loan elsewhere will be dropped.

However, they are still loans. Companies wishing to take them out will be 100% liable for the debt and the government has not capped the interest rate banks can charge even though banks are able to borrow at close to 0%.

The loans may now be available to more businesses but what's not clear is whether firms want them.

The above article is currently buried in the business news pages. There doesn't appear to be a lot of scrutiny in the media regarding the various schemes offered by the Government. Prior to this "revamp" how many were aware that one of the conditions for applying was the requirement to have been refused a commercial loan? Yet, when the scheme was announced it was spun as an interest free loan for ALL businesses large or small, with "attractive" terms once the interest free period is over.

IMO, the same thing is happening with employees who think they have a right to be furloughed. The Government spin is likely to be very different to the reality for employers who will need to apply for the grants and deal with HMRC; hence the reason some large, well-resourced companies are seemingly refusing to take up this offer of "free" money. On a separate note, I also can't believe that Martin Lewis is prepared to believe what Treasury insiders tell him. No fault of Martin's, but this Government can't even be trusted to be transparent when they are making "on the record" announcements to the whole nation.