Coronavirus Business Interruption Loan Scheme

(asked on 20th April 2020) - View Source

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

To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will suspend state aid rules for the Coronavirus Business Interruption Loan Scheme so that loss-making companies can be considered eligible for that scheme.


Answered by
Paul Scully Portrait
Paul Scully
This question was answered on 28th April 2020

Although the UK has left the EU, under the terms of the Withdrawal Agreement, the EU State Aid rules continue to apply in the UK until the end of the Transition Period.

It is not possible for the UK (or indeed any EU Member State) to unilaterally suspend the EU State aid rules.

However, it should be noted that the European Commission has introduced some flexibilities into the rules to deal with the impacts of the Coronavirus, in the form of a Temporary Framework.

The Coronavirus Business Interruption Loan Scheme (CBILS) is a State Aid approved scheme under the Temporary Framework. Companies that are in difficulty are eligible for support, in recognition of the impact of Coronavirus, unless they were in difficulty on 31 December 2019, prior to the outbreak.

CBILS does include a provision enabling banks to make the facility available on a de minimis basis to businesses that would not otherwise be eligible, for example because they were in difficulty as at 31 December 2019.

However, the British Business Bank is establishing a new Future Fund to support the UK’s innovative businesses currently affected by Covid-19. This will launch in May and is intended to help businesses that have been unable to access other government business support programmes, such as CBILS, because they are either pre-revenue or pre-profit and typically rely on equity investment. The £500m scheme will deliver an initial commitment of £250m of new government funding which will be match funded by private investment.

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