CONSERVATIVE
New Forest East

TREASURY – SUPPORT FOR MEDIUM-SIZE BUSINESSES RUN FROM HOME [42863] – 2 May 2020

Dr Julian Lewis: To ask the Chancellor of the Exchequer, what (a) grants and (b) other support, apart from furlough support through the Coronavirus Job Retention Scheme, he plans to make available to medium-size businesses which are (a) run from home, (b) not being paid for their services during the covid-19 outbreak and (c) required to pay their suppliers in advance; and what guidance he plans to issue to banks that are awarding loans under the Coronavirus Business Interruption Loan Scheme on flexibility in administering that scheme for businesses that are under financial pressure as a result of the covid-19 outbreak.  [42863]

[Due for Answer on 11 May.] 

ANSWER

The Exchequer Secretary to the Treasury (Kemi Badenoch): The Local Authority grants schemes have been designed to ensure that payments are made quickly and efficiently to small businesses facing particularly high fixed-property costs. Businesses which are not eligible for the grants may benefit from other measures in the Government’s unprecedented package of support for business, including:

  • The Self-Employed Income Support Scheme (SEISS)
  • The Coronavirus Job Retention Scheme (CJRS)
  • The Coronavirus Business Interruption Loan Scheme (CBILS)
  • The Bounce Back Loan Scheme (BBL) for small and micro enterprises
  • VAT deferral for up to 12 months
  • The Time To Pay scheme, through which businesses and self-employed individuals in financial distress, and with outstanding tax liabilities, can receive support with their tax affairs
  • A three-month mortgage holiday

On 3 April the Government extended CBILS so that all viable small businesses affected by COVID-19, and not just those viable businesses unable to secure regular commercial financing, will now be eligible if the lender believes they will need finance to see them through these unprecedented times. This exceptional support is designed to enable all long-term viable businesses experiencing difficulties as a result of the coronavirus outbreak to access finance.

The Government has also removed the forward-looking viability test, that required an assessment of whether the business can trade out of the crisis, and the per lender portfolio cap, to give lenders the full 80% guarantee across all CBILS lending. Finally, no lender can take a personal guarantee for a loan of less than £250,000. For loans over the value of £250,000, a personal guarantee can only be taken for 20% of the outstanding balance. However, a lender is not allowed to take a personal guarantee against a borrower's principle residence under the scheme.