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.
Previously, government-backed loans for small businesses were only available to firms that had been turned down for a commercial loan from their bank.
That saw businesses being asked to pay interest rates of as much as 30%.
What are the new changes to CBILS?
CBILS has been significantly expanded along with changes to the scheme’s features and eligibility criteria. The changes mean even more smaller businesses across the UK impacted by the coronavirus crisis can access the funding they need. Insufficient security is no longer a condition to access the scheme.
Importantly, access to the scheme has been opened up to those smaller businesses who would have previously met the requirements for a commercial facility but would not have been eligible for CBILS. This significantly increases the number of businesses eligible for the scheme. The expanded scheme will be operational with lenders from Monday 6 April 2020.
The British Busines Bank has communicated that these changes should be retrospectively applied by lenders for any CBILS facilities offered since 23 March 2020. For any commercial (non-CBILS) facilities offered since the same date, providing the borrower meets the CBILS eligibility criteria, lenders have been asked to bring these facilities onto CBILS wherever possible (e.g. where the lender is accredited to offer the same facility through CBILS) and changes retrospectively applied as necessary.
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