More than 40 banks, building societies and alternative lenders have been approved to provide finance under the Coronavirus Business Interruption Loan Scheme (CBILS), it has been revealed.
The news comes after the Co-operative Bank, Cynergy Bank, OakNorth Bank, Starling Bank and small business lending platform Funding Circle received accreditation.
According to scheme administrator the British Business Bank (BBB), now more than 80 per cent of small and medium-sized enterprises (SMEs) have an existing finance relationship with at least one approved lender.
Commenting on the report, Keith Morgan, CEO at the BBB, said: “Our accredited lenders have seen an incredible demand for CBILS in the past few weeks, so we are helping to meet that demand and provide even more choice for smaller businesses by approving additional lenders for accreditation to the scheme.
“These new lenders will be able to deploy vital funding and get additional finance flowing to smaller businesses across the UK as quickly as possible.”
What is the Coronavirus Business Interruption Loan Scheme?
The Government’s landmark corporate finance scheme is designed to get cash into the hands of businesses severely affected by Covid-19. Under the scheme, lenders can provide finance facilities of up to £5 million to SMEs in the form of loans, overdrafts, invoice finance and asset finance facilities.
To encourage lenders to approve and fast-track finance applications, the government will provide lenders with a guarantee of 80 per cent on each loan (subject to pre-lender cap on claims). The Government will also cover the first 12 months of interest payments and any lender-levied fees.
In addition to this, no lender will be allowed to ask for personal guarantees for facilities under £250,000. For amounts above £250,000, personal guarantees will be capped at 20 per cent.
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