The Chancellor has announced the extension of the current Coronavirus Business Interruption Loan Scheme (CBILS) to all viable small businesses affected by COVID-19 and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time.
New rules will prevent lenders from requesting personal guarantees for loans under £250,000, and the government has also stated that it will make operational changes to speed up lending approvals and continue to cover the first twelve months of 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 on the line, but the changes are design to allay concerns regarding personal assets.
The new rule will apply to finance already offered under the scheme, to ensure that all business owners receive the same level of government protection.
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