Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he is taking to ensure that businesses facing financial difficulties during the covid-19 outbreak are able to obtain the overdrafts they need from banks.

The Government recognises that the outbreak of COVID-19 may lead to businesses facing financial difficulty and uncertainty.

The Government has set out an unprecedented package of support for all businesses affected by this crisis, including the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), and the Bounce Back Loan Scheme (BBLS).

Under CBILS, borrowers can apply for finance facilities, including overdrafts, of £50,001 to £5 million for up to 6 years. The Government will cover the first 12 months’ interest payments and any fees on these facilities.

Under CLBILS, borrowers can apply for finance facilities, including overdrafts, of up to £25 million for businesses with a turnover between £45 million and £250 million, and up to £50 million to businesses with a turnover of over £250 million.

Under BBLS, businesses can apply for a loan between £2,000 and £50,000, subject to a maximum of 25% of turnover, for a fixed 6-year term. The Government will cover the first 12 months’ interest payments and any fees, and no repayments are due for the first year. After this period the interest rate on these loans will be 2.5%, and there are no early repayment fees.