How does the new emergency coronavirus loan scheme work?
On Wednesday 11 March, the Chancellor revealed that the Government would launch an emergency loan scheme designed to support businesses affected by the Covid-19 outbreak.
Here’s what you need to know.
According to the Budget 2020 documents, the measure, known as the Coronavirus Business Interruption Loan Scheme, will be delivered by the British Business Bank.
Under the scheme, the Government will provide lenders with a guarantee of 80 per cent on each loan to give financiers confidence to invest in small and medium-sized enterprises (SMEs). The document adds that the Government will not charge businesses or lenders for this service.
Loans and overdrafts of up to £1.2 million will be supported, with the emergency guarantee assuring a total £1 billion in emergency finance.
Alongside this measure, small businesses eligible for Small Business Rate Relief (SBRR) will be eligible to claim up to £3,000 in grant funding. The Government said the move will help around 700,000 businesses affected by cash flow disruption and extended periods of employee absence.
Commenting on the emergency scheme, the Chancellor Rishi Sunak said: “Some businesses may experience increased costs or disruptions to their cash flow as a result of COVID-19. The Budget announces a set of measures to provide support to businesses during this temporary period by either reducing their costs or bridging cashflow problems arising from the outbreak, and to protect people’s jobs.”
Has your business been financially affected by the coronavirus outbreak? For urgent help and advice, get in touch with our expert team.