The government schemes (the Covid Corporate Financing Facility and the Coronavirus Business Interruption Loan Scheme) announced in response to the COVID-19 pandemic had a ”gap” in coverage. We discussed this “gap” and the challenges ahead for those companies stuck in that “gap” in COVID-19 UK: Finance - Mind the Gap - Insight. As predicted in that insight, the Chancellor has since sought to address this “gap” by announcing a further initiative on 3 April 2020. This latest scheme (the Coronavirus Large Business Interruption Loan Scheme), will allow companies with a turnover of between £45m and £500m to borrow up to £25m, largely guaranteed by the Government. Whilst the loans will not be interest free, they should still provide liquidity support for those companies previously stuck in the “gap”.
The Chancellor also announced changes to the Coronavirus Business Interruption Loan Scheme. The changes being: (i) dropping the need for companies to have first tried to get loans on normal commercial terms; and (ii) banning banks from asking for personal guarantees for company loans up to £250,000.
Further details are awaited from HM Treasury on the new Coronavirus Large Business Interruption Loan Scheme and the changes to the Coronavirus Business Interruption Loan Scheme.