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

To ask the Secretary of State for Business, Energy and Industrial Strategy, whether accredited Coronavirus Business Interruption Loan Scheme lenders are permitted to charge interest rates above 10 per cent for loans through that scheme.

The Coronavirus Business Interruption Loan Scheme (CBILS) is being delivered by more than 90 accredited lenders operating across the market. Lenders of the CBILS are permitted to set interest rates above 10%.

The interest rate charged on a CBILS facility is at the discretion of the Lender, in line with their own policies, as would be the case with any commercial facility. Under the CBILS scheme, SMEs do however benefit from lower initial costs, as the government provides a 'Business Interruption Payment' to cover any interest and Lender-levied fees within the first 12 months. Therefore, the interest rate, and any associated fees, should be determined based on lenders' normal pricing framework and take into account the benefits and costs of the guarantee.

The Government also guarantees 80% of a CBILS facility and lenders must pass the economic benefit of the existence of this guarantee to the borrower through lower pricing than it may otherwise have had.

For further information about interest rates after the initial 12-month period, businesses should speak to their lender on what interest rates they will charge after this time.