UK strengthens loan scheme to support businesses impacted by coronavirus outbreak

The British government has strengthened its coronavirus loan scheme for businesses affected by the COVID-19 pandemic amid grave concerns that the virus will take a heavy toll on the economy.

The government is extending the Coronavirus Business Interruption Loan Scheme (CBILS) so that all viable small businesses affected by COVID-19, not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time, the Chancellor of the Exchequer Rishi Sunak said Friday.

Designed for small and medium businesses, the CBILS will help viable business with a turnover of up to 45 million pounds (about 55 million U.S. dollars) to access government-backed finance of up to 5 million pounds (6.1 million dollars).

Meanwhile, Sunak announced the new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will provide a government guarantee of 80 percent to enable banks to make loans of up to 25 million pounds (about 30.6 million dollars) to firms with an annual turnover of between 45 million pounds (55 million dollars) and 500 million pounds (611.8 million dollars).

Loans backed by a guarantee under the CLBILS will be offered at commercial rates of interest and further details of the scheme will be announced later this month, he said.

According to Sunak, more than 90 million pounds (110.1 million dollars) of loans to nearly 1,000 small and medium sized firms have been approved under the CBILS since its launch last week. And the CLBILS has also provided almost 1.9 billion pounds (2.3 billion dollars) of support to larger firms and a further 1.6 billion pounds (2 billion dollars) has been committed.

But according to latest figures from the UK Finance, a trade association for the British banking and financial services sector, there have now been over 130,000 enquiries from businesses across the country for business interruption loans and only 983 have had finance approved.

Sunak believed the new scheme will help banks approve loans for the smallest businesses as quickly as possible. He said: "We are making great progress on getting much-needed support out to businesses to help manage their cash flows during this difficult time."

British business groups welcomed the new loan scheme. Adam Marshall, director general of British Chambers of Commerce said: "We're pleased that the Chancellor is listening and responding to the real-world concerns posed by firms across the UK who are urgently trying to access financial support."

The British government announced on March 17 to provide 330 billion pounds (403.8 billion dollars) of loans to support firms to get through the difficult moments as the coronavirus outbreak continues to escalate in the country.

(XINHUA)