More businesses invited to apply for Covid-19 support after EU State Aid changes
Even more struggling businesses affected by Covid-19 can now access finance under the Coronavirus Business Interruption Loan Scheme (CBILS), it has been announced.
It comes after changes to EU State Aid rules, meaning businesses classed as “undertakings in difficulty” now have greater access to Government-backed finance.
Under the changes, businesses “in difficulty” – defined as high-risk with high levels of debt and accumulated losses – can apply to CBILS, providing they have fewer than 50 employees and a turnover of less than £9 million.
This brings the scheme in line with the Bounce Back Loans (BBL) scheme, which already accepts businesses classed as “undertakings in difficulty”.
Commenting on the announcement, Michael Moore, Director General at the British Private Equity & Venture Capital Association (BVCA), said: “The BVCA welcomes the changes announced today as these will benefit many small businesses nationwide backed by private equity and venture capital. These businesses have strong growth prospects and it is right that the undertaking in difficulty definition was amended to take account of their value to the economy.”
The change comes after official figures revealed that the CBILS has now been used more than 57,000 times, delivering £12.6 billion of support to British businesses.
Under the scheme, borrowers can apply for up to £5 million in finance in the form of loans, overdrafts, invoice finance, and/or asset finance. The Government will guarantee the first 80 per cent of the loan value, as well as covering the first year of interest and fees.
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This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at time of publishing (7 August 2020).