Originally written by Timothy Adler on Small Business
How do I apply for a Coronavirus Business Interruption Loan?
The government has announced a new temporary Coronavirus Business Interruption Loan scheme, as part of a package of measures to help small business.
British Business Bank will deliver the loan scheme, which will launch within the next few weeks to support SMEs to access bank lending and overdrafts.
The government will provide lenders with a guarantee of 80 per cent of each loan – subject to a per-lender cap on the number of bad loans it can claim for.
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The scheme will support loans of up to £1.2m per small business. This new guarantee, which replaces the existing Enterprise Finance Guarantee (EFG), will initially support up to £1bn of lending.
Like the EFG, the idea is to give lenders more confidence in approving credit decisions for small businesses that have insufficient security to meet the lender’s normal requirements.
However, the Coronavirus Business Interruption Loan will offer more attractive terms for both small business and lenders than the EFG.
Lenders will not charge small businesses or banks for this guarantee.
However, the small business borrower will always remain 100-per-cent liable