BEIS shares its concerns regarding the coronavirus (COVID-19) business loan scheme

BEIS shares its concerns regarding the coronavirus (COVID-19) business loan scheme

The Chair of the Business, Energy and Industrial Strategy Committee (BEIS), Rachel Reeves, has addressed some of her concerns relating to the Coronavirus Business Interruption Loan Scheme (CBILS) in a letter to the Chancellor of the Exchequer, Rishi Sunak. The CBILS has been put in place by the government to support businesses by offering them access to affordable lending during the coronavirus (COVID-19) crisis. However, Rachel Reeves highlights that the way in which some lenders interpret the CBILS puts off SMEs seeking loans. She notes that several lenders have sought personal guarantees from SME owners, have applied high interest rates on the loans when the interest free period ends, and have been slow and reluctant to approach the British Business Bank to apply for loans. Various measures have been suggested to address these issues.

The suggestions include:

• to clarify the guidance on when CBILS should be offered

• to encourage lenders not to use personal guarantees

• to share guidance on levels of interest rates that should be charged by lenders

• to encourage lenders to be more proactive in approaching the British Business Bank

• to ensure medium-sized firms in the regions also have access to loans

• to demand lenders and the British Business bank to share weekly updates on the total amount of lending taking place through CBILS

The letter can be found here.

Source: Coronavirus Business Interruption Loans – Chair writes to Chancellor

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