Businesses now able to access government coronavirus help

Homeland March 24, 2020

Businesses will be able to access government support to keep operating in the face of the global economic emergency brought on by the coronavirus pandemic.

The Coronavirus Business Interruption Loan Scheme will provide government-backed loans of up to £5 million to small and medium businesses, while the Bank of England’s Covid Corporate Financing Facility will give a quick and cost-effective way to raise working capital for those large firms who need it.

More than £330 billion of loans and guarantees to help firms continue operating will be available for applications from the two schemes – as the government delivers on its commitment to do everything it can to support business and manage cashflows during this difficult time.

For small and medium sized businesses, the new Coronavirus Business Interruption Loan Scheme is now available for applications. This scheme will help any viable business with a turnover of up to £45m to access government-backed finance of up to £5 million. Interest payments and any lender-levied fees for businesses will be covered by the Government for an initial period of up to twelve months.

The government will provide lenders with a guarantee of 80% on each facility to give lenders further confidence in continuing to provide finance to SMEs. The scheme is available through more than 40 accredited lenders, which are listed on the British Business Bank website.

The Bank of England’s new lending facility for larger firms – the Covid Corporate Financing Facility – will also be open for applications to participate. By purchasing short-term corporate debt – known as commercial paper – the scheme provides a quick and cost-effective way to raise working capital for companies who are fundamentally strong but are experiencing severe disruption to cashflows, helping businesses across a range of sectors to pay wages and suppliers. The scheme is open to firms that can demonstrate that they were in sound financial health prior to the impact of Coronavirus. Companies who wish to use the scheme do not need to have issued commercial paper before.

A government information campaign has also launched to ensure businesses are aware of the support available to them and how to access it. In addition to a new central website, the campaign will use media channels including radio, social media and television to reach businesses eligible for help.

The Chancellor of the Exchequer, Rishi Sunak, said: “We are working round the clock to do whatever it takes to protect our people and businesses. That means that we are not only taking unprecedented action but doing so at unprecedented speed, because we know that businesses and their employees need help now.”

The Ministry of Defence has placed SMEs at the heart of its defence procurement strategy and is committed to achieving a 25% spend by 2022.

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