What help can small businesses get during coronavirus outbreak? The Coronavirus Business Interruption Loan Scheme explained

Thankfully, Boris Johnson's second daily press conference of the outbreak focused around chancellor Rishi Sunak's announcement of a stimulus package designed to protect businesses impacted by Covid-19; the financial implications of the conference will be far reaching.

Among the announcements was that of a new temporary Coronavirus Business Interruption Loan Scheme.

It aims to support businesses to access bank lending and overdrafts. Here's how it all works:

How does the Coronavirus Business Interruption Loan Scheme work?

Speaking at the daily briefing, Mr Sunak said: “The coronavirus pandemic is a public health emergency. But it is also an economic emergency.

He added: “Any business who needs access to cash to pay their rent, the salaries, suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms.

“And if demand is greater than the initial £330 billion I’m making available today, I will go further and provide as much capacity as required. I said whatever it takes – and I meant it.

“That support will be delivered through two main schemes: to support liquidity amongst larger firms, I have today agreed a new lending facility with the Governor of the Bank of England to provide low cost, easily accessible commercial paper.

“To support lending to small and medium-sized businesses, I am extending the new Business Interruption Loan Scheme I announced at the Budget last week, so that rather than loans of £1.2 million, it will now provide loans of up to £5 million, with no interest due for the first six months.”

The government will provide lenders with a guarantee of 80 per cent on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to small and medium-seized enterprises (SMEs).

The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

Businesses can access the first six months of that finance interest free, as government will cover the first six months of interest payments.

Is my business eligible?

To be eligible for the scheme, your business must:

- Be UK based in its business activity with annual turnover of no more than £45m

- Have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty

- If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.

When is the scheme live?

The scheme went live on Monday 23 March and will initially run for six months.

How do I apply?

The British Business Bank (BBB) says, "any small business interested in CBILS should, in the first instance, approach one of the 40+ accredited lenders with their borrowing proposal.

"If the CBILS lender can offer finance on normal commercial terms without the need to make use of CBILS, they will do so.

"Where the small business has a sound borrowing proposal but no, or inadequate security, the lender will consider the small business for support via CBILS."

What other help is available?

Other measures are in place to try to protect small business in this most uncertain of times, including support for businesses who are paying sick pay to employees, and businesses that pay business rates.

For more information,