The government has announced that it is extending CBILS so that all viable small businesses affected by COVID-19 will be eligible, not just those unable to secure regular commercial financing.
The government has also made the following changes to CBILS;
- Lenders cannot request personal guarantees for loans under £250,000
- For loans over £250,000, personal guarantees will be limited to 20% of any amount outstanding after any other recoveries from business assets
- Banks cannot ask business owners to use their house as collateral.
- Banks are to make operational changes to the scheme to speed up lending
These changes will also apply to finance already offered under the scheme.
In addition, companies with a turnover of between £45 million and £500 million will now be able to access loans of up to £25 million.
CBILS will be offered at commercial interest rates but the government will continue to cover the first twelve months of interest and fees.
Full details of the extended scheme will be announced soon.