Wayne Thomas considers the calls to speed up grant funding and improve the Coronavirus Business Interruption Loan Scheme.
Last night Alok Sharma confirmed that £12billion, promised to local authorities to provide grants to small businesses, had arrived with local authorities and that he had made it clear to councils that the money must reach businesses as quickly as possible.
Some councils have already done this, and we applaud this. For those that have not yet managed to sort out the logistics, we urge you to step up and sort this process out as a matter of urgency. Many of our small businesses desperately need the grants to survive.
And what of the Coronavirus Business Interruption Loan Scheme – CBILS? As a new scheme, it seems beset with difficulties. As the banks are required to assess the loans on normal commercial terms, can take personal guarantees and the government guarantees only 80% of the loan meaning the banks are left with a 20% exposure, it seems very few businesses have been able to access the CBILS loan scheme. The Business Secretary’s comments in last night’s Downing Street briefing reflect this:
“We are listening all the time. And in response to concerns that we’ve heard from businesses, we are looking at ways in which we can ensure they get the support they need. The Chancellor will be saying more on this in the coming days.
It is crucial that when we overcome this crisis, as in time we will, that businesses are in a good position to move forward.”
Speculation is already mounting as to the changes that may be announced, as early as this week.
- the banks will not be required to assess whether the business is able to raise the finance through other lending options
- no personal guarantees will be required for loans up to £250K
- for loans over £250K personal guarantees will be limited to 20% of the loan, covering the bank’s exposure
- Banks to agree to a modest “reversion rate” – interest rate applied after initial 12-month period
We are hopeful that the government will deliver on its promise to support businesses and do all it can to simplify and speed up the delivery of much needed grants and business loans.