CBILS opened up
State aid change allows more firms to access support
Banks are being urged to lend more to firms
Firms denied access to the main government Covid loan scheme will find it easier to get help after changes to state aid guidelines came into effect today.
European Union rules had meant some viable British firms with significant debts were classed as “undertakings in difficulty” (UIDs). This barred them from borrowing through the UK’s coronavirus business interruption loan scheme (CBILS).
The EU changed its rules last month so that companies with fewer than 50 employees and a turnover below £9m will not be considered UIDs.
The British Business Bank which runs CBILS put the new rules into force today and the Treasury has contacted other lenders “setting out their expectation” that more firms will receive support.
UK Small business minister Paul Scully said the changes “will mean that even more small firms will be able to access much-needed financial support.”
The Bounce Back Loan Scheme (BBLS) is unaffected by this change.
Allie Renison, head of Europe and trade policy at the Institute of Directors, said: “This is a welcome move towards helping more British businesses access much-needed finance.
“The UID [undertakings in difficulty] test has caused a lot of frustration, and the IoD has been knocking hard on the door of both government and Brussels to secure this change.
“CBILS will continue to be an important lifeline for firms, especially as some have fallen through the gaps of relief schemes that are now winding down.