Government unveils changes to emergency loan programs

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Chancellor Rishi Sunak announced a series of new measures to continue supporting small businesses during the pandemic, including extending the application deadline for all of its emergency loan programs to the end of November.

The four plans include the Coronavirus Business Interruption Loan Plan (CBILS), Coronavirus Large Business Interruption Loan Plan (CLBILS), Rebound Loan Plan (BBLS), and the Future Fund.

Sunak’s winter savings plan, announced to parliament, also confirmed that BBLS and CBILS loans can now be extended from six to 10 years.

Additionally, he introduced Pay As You Grow – an extension of BBLS to give businesses more time and flexibility to repay their loans.

In addition to the loan extension, businesses can now choose to pay interest only and can request a full suspension of repayments for six months.

No business accepting Pay As You Grow will have their credit rating affected as a result.

Sunak (pictured) also confirmed that the government guarantee on CBILS loans will be extended for up to 10 years, which he says will allow lenders to give people more time to repay.

The Chancellor added that the Treasury is starting to work on a new successor loan program, which is expected to start in January 2021.

Read more: CBILS could be replaced by some form of EFG scheme

“Over the past six months, we have supported businesses with tens of billions of pounds in tax deferrals and generous government guaranteed loans,” Sunak said.

“These policies have been a lifeline.

“But right now, businesses need every extra pound to protect jobs rather than paying off loans and tax deferrals.”

Alternative lenders have welcomed today’s announcement.

“The extension of the application deadline, while modest, will allow more companies to access financing,” said Ravi Anand, managing director of accredited lender CBILS ThinCats.

“The flexibility of payments and terms will help businesses manage costs and give lenders more confidence to help businesses emerge from the pandemic, enabling long-term and sustainable growth.

“In addition, next year’s new program should give the broader business community time to plan with greater confidence, knowing that funding should be available.”

Chirag Shah, chief executive of Nucleus Commercial Finance, said the loan program extensions would be good news for business owners across the country,

“SMEs are the backbone of our economy, and we hope these measures will give UK businesses the support they need at this difficult time,” he added. “But while this announcement brings immediate relief to small businesses, the Chancellor must also present long-term plans to ensure that they can not only survive the coronavirus crisis, but thrive for years to come: c This is where the alternative finance industry has a vital role to play. to play.”

Josh Levy, managing director of Ultimate Finance, called the changes a “positive step”.

“While the devil will be in the details and it is not clear whether this will go far enough in terms of targeted support for the most affected sectors, it nevertheless appears to be a positive step in smoothing out the various cliffs for SMEs. that are looming so conspicuously., “he said.

“Non-bank lenders have an essential role to play in financing SMEs during this crisis and allowing the return to growth. As a CBILS accredited lender, we are delighted that businesses have the opportunity to continue accessing financing under these programs until the end of the year with plans for a replacement program in 2021. ”

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