Watch the webinar
Our Daily Coronavirus Webinar on 26 March included our regular update from Dame Carolyn Fairbairn, as well as a special focus on access to finance. We discussed a wide range of topics, and answered questions from the audience.
Key questions we answered
- Since the Government announced its major financial support package to help businesses deal with the impact of Coronavirus – we’ve received hundreds of queries around the Coronavirus Business Interruption Loan Scheme in particular. Please could you recap for the listeners – what that scheme is there to do, and who is eligible?
- The Coronavirus Business Interruption Loan Scheme (CBILS), is there to provide government-backed finance of up to £5m to SMEs. That’s businesses with a turnover of up to £45m.
- The Scheme offers a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities.
- It’s accessible via your bank and other providers and guaranteed by the British Business Bank.
- This government-backed guarantee aims to turn – in these extraordinary circumstances – what could potentially have been a ‘no’ from the lender, with regards to credit, into a ‘yes’.
- For large firms of investment grade or equivalent needing support, there is the Bank of England’ Covid Corporate Financing Facility (CCFF).
- The focus now, of course, is to ensure these schemes are running as quickly and sustainably as possible.
- And we’re working closely – with the CBI, the financial services industry, HM Treasury, and the Bank of England to ensure that’s happening.
- Businesses have suggested that if the banks are going to require personal guarantees to access CBILS, they may as well cancel the scheme as banks will be unlikely to lend. Is this a fair assessment?
- Our guidance has been updated and is clear. We will not allow banks to enforce personal guarantees against people’s homes.
- Banks are talking to the British Business Bank and more are moving in the right direction on this.
- We also encourage businesses to shop around as there are 40 different lenders deploying the scheme. All of which have different lending policies.
- We know that many companies are falling through the cracks between the CBILS for SMEs and the Bank of England’s support for large companies. What is being done to help this “stranded middle”?
- There are thousands of companies that fit within the description of the “stranded middle”.
- These tend to be companies that play a critical role in wider supply chains, and regional manufacturers with thousands of jobs depending on them.
- These ‘stranded middle’ companies are eligible for the coronavirus job retention scheme.
- But, again, with that cash not due to land until the end of April, the CBI has been in constant touch with Treasury and banks to address this gap as a priority.
- The CBI are asking businesses to share examples of the challenges they are facing on this. We want examples to include where businesses are based, their turnover, and specific details on the challenges they are facing. This helps bring the CBI’s case to life when having discussions with BEIS and the Treasury.
- Businesses should share examples of the challenge they are facing, your turnover, where you are based, this helps gives the CBI much needed detail to inform our discussions with the Treasury.