Winter Economy Plan

The Coronavirus Business Interruption Loan Scheme (CBLIS) was set up in the wake of COVID-19 to support SMEs access emergency finance. Although the emergency loan scheme has accelerated recently, QASSS supports the Federation of Small Businesses (FSB) call for more work to be done.

Figures announced by UK Finance this week (of which QASSS is an Associate Member), showed that just over 6,000 of the 28,461 SME emergency loan applications have been successful, albeit the figures show that the number of loans continues to rise daily.

Mike Cherry, National Chairman of the FSB said,

“This improvement marks a starting point, but while one in five formal CBILS applications are approved, the major banks claim their approval rates for standard commercial loans are many times higher than that. These loans are state-backed, so approvals should be higher still. There’s still a lot of work to do.”

Chancellor Rishi Sunak said it was vital this “upward trajectory” was maintained “to support jobs and the economy during this crisis”. However, the emergency loans scheme has been criticised on several grounds including a demanding form-filling process, slow response by banks and just how difficult it can be to secure these loans.

Ciaran Harkin, Managing Director of QASSS supports the call for urgent action to help SMEs,

“The home improvement sector represents around a fifth of SMEs. Given the lack of clarification around whether companies can undertake even essential or emergency repairs, the scheme is failing to get money out fast enough to support struggling SMEs in our sector and across industry as a whole.”

More about CBLIS

The Coronavirus Business Interruption Loan Scheme supports SMEs with access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5 million in value and for up to 6 years.

The government will pay to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will not face any upfront costs and will benefit from lower initial repayments. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. This scheme is being delivered through commercial lenders, backed by the British Business Bank. On loans under £250,000 lenders have now been banned from requesting personal guarantees.

You are eligible for the scheme if:

  • Your business is UK based, with turnover of no more than £45 million per year
  • Your business meets the other British Business Bank eligibility criteria

To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites.

All major banks are offering this scheme. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow. The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.

The loan scheme provides the bank with a Government-backed guarantee which will enable your business manager to approve it, whereas, without that guarantee, your request for a loan may have been declined. Please note: it’s important that you are aware that you, the borrower will always remain 100% liable for the debt. The CBILS guarantee is to the lender, not you.

To find out more about government measures to support businesses during COVID-19, click here to view our Coronavirus Business Round-Up.


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