Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether supporting a business’ immediate cash flow is considered to be a sound borrowing proposal under the Coronavirus Business Interruption Loan Scheme.

Officials are working at pace to deliver the measures for small businesses as announced by the Chancellor. The Coronavirus Business Interruption Loan Scheme, which will provide financing facilities for SMEs of up to £5 million, was launched on Monday 23 March.

Under the Coronavirus Business Interruption Loan Scheme, the government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. Lenders will pay a small fee to access the scheme. The government will not charge businesses for this guarantee, and to provide additional support at this difficult time, will also cover the interest costs and fees for the first 12 months. Altogether, these features of the scheme will help borrowers by making external finance more affordable at this difficult time.

All viable UK-based businesses with a turnover of less than £45m will be eligible to apply for a loan under the scheme. This scheme is part of a comprehensive package of measures designed to support small businesses facing difficulties in this period of uncertainty, which also includes: a Coronavirus Job Retention Scheme; the deferring VAT and Income Tax payments; statutory sick pay relief package for SMEs; and a small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief.

Further detail of government support is available at: www.businesssupport.gov.uk