UK extends business support scheme over coronavirus

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.