MoorcroftsMoorcroftsMoorcroftsMoorcrofts
Menu
  • Services
  • Team
  • Careers
  • Blog
  • Events
  • Contact

Lenders instructed to increase coronavirus lending to smaller and struggling businesses

Lenders instructed to increase coronavirus lending to smaller and struggling businesses

7th August 2020

Share this post

The criteria for businesses to become eligible for the Coronavirus Business Interruption Loan Scheme (CBILS) has been expanded allowing with immediate effect, small and struggling businesses to apply for lending under the CBILS.

Previously, the criteria required applicants to be a number of things, but a key item was that an applicant must not be classed as a “business in difficulty” on 31 December 2019.  A “business in difficulty” is one that, as at 31 December 2019, had:

  • accumulated losses of more than half of its subscribed share capital for limited companies, or for unlimited liability companies its capital; or
  • started, or had fulfilled the criteria to be put into, collective insolvency proceedings; or
  • previously received rescue aid that was yet to be reimbursed (or, in the case of a guarantee, terminated); or
  • received restructuring aid, and was still under a restructuring plan; or
  • where it does not meet the SME criteria) has fallen below solvency ratios for the previous two years

The Treasury has now written to major lenders, to express that:

“By working with key industry bodies like the CBI and the BVCA, the government sought changes from the European Commission to ensure that businesses that were viable before the Covid-19 outbreak would be able to access support through CBILS. The Commission has now amended the Temporary Framework to allow such support to micro and small businesses, which were classed as undertakings in difficulty on 31 December 2019.”

Going on to state that:

“We therefore wanted to set out our expectation that all accredited lenders will implement these changes in their own decision-making processes. This will ensure that even more businesses are receiving support at this difficult time, keeping in mind that lenders may now be able to offer CBILS facilities to businesses that were previously ineligible”

This means, with the potential shock to businesses given that the furlough scheme has been cut back, the change in EU state aid rules will allow businesses who were unable to access funds under the CBILS scheme to now access government funds.

This expansion of the CBILS will allow smaller businesses – meaning those with fewer than 50 employees and turnover less than £9 million of turnover – who previously were not eligible for lending under the CBILS, will now be eligible. This will be welcome news to those small businesses who have incurred large liabilities to be eligible for loans up to £5 million.

Please contact the Moorcrofts’ corporate team, if you would like further information on the Coronavirus Business Interruption Loan Scheme or other debt or equity financing .

Related Post

22ND MAY 2023

OpenChain UK Work Group Meeting Announced

The details for the June meeting of the OpenChainUK WorkGroup have now been announced: Date: 7th June 2023 Time: 12:00 – 17:00 Venue: First Light Fusion – Mead Road, Yarnton, Kidlington OX5 1QU Please note The meeting will also...

16TH MAY 2023

Allyship in the workplace webinar

Recent Posts

  • Allyship in the workplace webinar

    16th May 2023
  • OpenChain UK Work Group March 2023 Meeting

    21st March 2023
  • OpenChain UK Work Group Meeting Announced

    22nd May 2023

Get in touch

team@moorcrofts.com
T. +44 (0) 1628 470000
F. +44 (0) 1628 470001

Find us

Thames House
Mere Park
Dedmere Road
Marlow
Bucks
SL7 1PB
Moorcrofts LLP is a limited liability partnership registered in England and Wales under number OC311818. Partners: Andrew Katz, Theresa Hunter, Julia Ferguson, Matthew Jenkin, Peter Woolley, Tim Astley and William Pearce. Authorised and regulated by the Solicitors Regulation Authority (number 419658) VAT no. GB 727298404

"Partner" means a member of Moorcrofts LLP or a person of equivalent status, qualification and experience

Privacy and cookies  | Service and price transparency  | Complaints

© 2023 Moorcrofts LLP, All Rights Reserved.