Financial and business news from Bulgaria

UK extends business support scheme over coronavirus

British Finance Minister Rishi Sunak today announced an update on the scheme under which banks will support companies hit by the coronavirus, Reuters reported as quoted by BTA.
Following are the main points:

WHO METHS THE CONDITIONS?

- Initially, only firms with a turnover of up to £45 million ($55 million) can apply for loans of up to £5 million;

- They must be able to prove that their business is affected by the coronavirus crisis;

- They must have a business offer that would be feasible. if it were not for the coronavirus;

- According to the scheme extension announced today, companies with a turnover of £45 million to £500 million can apply for loans of up to £25 million;

- Larger companies are covered by a separate Commercial Finance Facility because of Covid-19, whose value as of Wednesday was 1.9 billion pounds.

Creditors

- Approved 40 lenders under the scheme, mainly large banks;

- Non-bank lenders and smaller firms lobby to participate;

- The government guarantees 80 percent of the loan;

- Guarantees are provided only after the creditor has exhausted all other forms of debt recovery;

- The state pays interest and fees for the first 12 months;

- After criticism, lenders cancelled the requirement for personal guarantees on lands worth up to £250,000.

PROBLEMS PROBLES

- Some borrowers say that the procedure is bureaucratic, have not been able to connect the bank phone lines overloaded during the first days of the scheme;

- Borrowers are packed by burdensome requirements for personal guarantees and other forms of security;

- So far only 1250 loans from over 130,000 applications have been granted;

- Banks are concerned that they are being forced to lend firms that will go bankrupt anyway.

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Administrator • 2020-03-05 15:30:07