To provide loans of up to £5million for up to six years to businesses with a turnover of less than £45million - replacing the Enterprise Finance Guarantee but on more attractive terms including twelve months interest free. A business needs to meet the other British Business Bank eligibility criteria of which the core one is a company needs to have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender and for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty.
Businesses above the turnover threshold may apply for up to £25 million under the CLBILS (Coronavirus Large Business Interruption Loan Scheme).
Important changes to the Government Coronavirus Business Interruption Loan Scheme ("CBILS"):
From Monday 6 April CBILs has been expanded and its eligibility criteria relaxed and is summarised as follows:
Under the plans, the UK’s Insolvency Framework will add new restructuring tools including:
The proposals will include key safeguards for creditors and suppliers to ensure they are paid while a solution is sought.
The government will also temporarily suspend the wrongful trading provisions to give company directors greater confidence to use their best endeavours to continue to trade during this pandemic emergency, without the threat of personal liability should the company ultimately fall into insolvency.
Existing laws for fraudulent trading and the threat of director disqualification will continue to act as an effective deterrent against director misconduct.
Jennifer Marshall, president of the Insolvency Lawyers Association and chair of the City of London Law Society Insolvency Sub-Committee said: "We welcome and support these proposals. Suspending wrongful trading, in particular, will assist directors in accessing Government or bank funding without concerns regarding personal liability."
"The insolvency profession in the UK is hugely talented and these reforms, together with existing rescue tools such as administration, could really assist in saving livelihoods."
Updated 12 May 2020