Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether plans in the Winter Economy Plan to give Coronavirus Business Interruption Loans lenders the ability to extend the length of loans from six to ten years (a) have been delivered and (b) are being offered by those lenders.

Following the Chancellor’s announcement at the Winter Economy Plan, to help businesses repay their Coronavirus Business Interruption Loans (CBILS) the Government have amended the CBILS rules to allow lenders to extend loan terms from six to a maximum of ten years where the borrower is in difficulty and lenders judge that the extension will help borrowers repay their loan.

The British Business Bank recently issued guidance to all accredited lenders which allows them to extend the term of existing CBILS facilities beyond 6 years up to a maximum of 10 years. Therefore, lenders are now able to extend the term of existing CBILS facilities to SMEs. An extension can be granted at the discretion of the lender and would be given in line with a lender’s particular forbearance policies.

CBILS term extensions will be offered at the discretion of lenders, unlike the “Pay As You Grow” options for Bounce Back loans. Extensions will be limited to those borrowers that lenders assess are in difficulty and will benefit from the extension, and only for the duration required, meaning that lenders may offer an extension to 7 years, for example, rather than the maximum 10 years allowed.