The British government has announced that, as of today (23 March) business will be able to access government funding to keep operating in the face of the global economic emergency brought on by coronavirus.
Details of two new loan schemes are being confirmed and an information campaign the government launched today so that businesses know how to get help.
More than £330bn of loans and guarantees to help firms continue operating will be available for applications from the two schemes launching today.
We know that businesses are in urgent need of access to funding during these unprecedented times. The Business Interruption Scheme will make it easier for banks to lend and businesses to borrow. This will ensure that credit keeps flowing to where it is needed, when it is needed."
For small and medium sized businesses, the new Coronavirus Business Interruption Loan Scheme is now available for applications. This scheme will help any viable business with a turnover of up to £45m to access government-backed finance of up to £5m. Interest payments and any lender-levied fees for businesses will be covered by the Government for an initial period of up to twelve months.
The government will provide lenders with a guarantee of 80% on each facility to give lenders further confidence in continuing to provide finance to SMEs. The scheme is available through more than 40 accredited lenders, which are listed on the British Business Bank website.
The Bank of England's new lending facility for larger firms - the Covid Corporate Financing Facility - will also be open for applications to participate from this morning. By purchasing short-term corporate debt - known as commercial paper - the scheme provides a quick and cost-effective way to raise working capital for companies who are fundamentally strong but are experiencing severe disruption to cashflows, helping businesses across a range of sectors to pay wages and suppliers, the government said.
The scheme is open to firms that can demonstrate that they were in sound financial health prior to the impact of Coronavirus. Companies who wish to use the scheme do not need to have issued commercial paper before.
A government information campaign has also launched today to ensure businesses are aware of the support available to them and how to access it. In addition to a new central website, the campaign will use media channels including radio, social media and television to reach businesses eligible for help.
The chancellor of the exchequer, Rishi Sunak, said, "We are working round the clock to do whatever it takes to protect our people and businesses. That means that we are not only taking unprecedented action but doing so at unprecedented speed, because we knowthat businesses and their employees need help now."
Alok Sharma, business secretary, said: "We know that businesses are in urgent need of access to funding during these unprecedented times. The Business Interruption Scheme will make it easier for banks to lend and businesses to borrow. This will ensure that credit keeps flowing to where it is needed, when it is needed."
Andrew Bailey, Bank of England governor, added: "The Bank of England has taken a number of steps in recent weeks to support the UK economy through the economic shock caused by covid-19. On Monday a new lending scheme, the Covid Corporate Financing Facility, will open to help businesses manage through this period of uncertainty. Combined with steps taken by the Government, this will help companies through this difficult time and support the needs of the people of this country."