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3rd April 2020
HM Treasury eases CBILS loan scheme to encourage higher take up
The emergency loans scheme for businesses struggling to survive amid the coronavirus pandemic has been revamped following strong criticism.
The Treasury said it had received more than 130,000 loan enquires from firms but fewer than 1,000 had been approved.
Business Secretary, Alok Sharma, said the changes to the scheme would make it easier for firms to access loans.
Chancellor Rishi Sunak will speak to the banks.
Originally, government-backed loans for small businesses were only available to firms that had been turned down for a commercial loan from their bank.
Applications in future will not be limited to businesses that have been refused a loan on commercial terms. The Treasury did not put in place restrictions on the interest rates that banks can charge for loans.
Larger firms with a turnover of up to £500m will also be eligible for more help.
The revamped scheme will offer government-backed loans of up to £25m to firms with revenues of between £45m and £500m.
"We have also listened to the concerns of some larger businesses affected by Covid-19 and are announcing new support so they can benefit too," said the Chancellor.
Banks will also be banned from asking company owners to guarantee loans with their own savings or property when borrowing up to £250,000.
The Chancellor added "We are making great progress on getting much-needed support out to businesses to help manage their cashflows during this difficult time-with millions of pounds of loans and finance being provided to hundreds of firms across the country.
And now I am taking further action by extending our generous loan scheme so even more businesses can benefit."