Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will make it his policy to (a) start the (i) CBILS 12-month interest free period and (ii) capital repayment holiday when lockdown is lifted and (b) reduce the CBILS rate.

Many businesses have already begun making capital repayments relating to their Coronavirus Business Interruption Loan Scheme (CBILS) facility. While the Government covers the interest payments and any lender-levied fees due on CBILS loans for the first twelve months of the loan, via a Business Interruption Payment, repayments of capital are required during this period unless a lender chooses to grant additional forbearance measures.

Lenders are able to extend the repayment period for CBILS facilities beyond 6 years (up to a maximum of 10 years) where this is needed in connection with the provision of forbearance. CBILS term extensions are offered at the discretion of lenders.

The Government does not set interest rates in connection with CBILS facilities, as CBILS operates as a delegated scheme. All final lending decisions including on pricing are at the discretion of the lender, and the rate varies in line with the lender’s own policies, as would be the case with any commercial facility.

However, as part of the accreditation process undertaken by the British Business Bank, lenders are required to demonstrate that the economic benefit of the guarantee is passed on to consumers through a proportionate reduction in their pricing for CBILS facilities.