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

To ask the Secretary of State for Business, Energy and Industrial Strategy, what feedback the Government has received on the effectiveness of the Coronavirus Business Interruption Loan Scheme; and from whom that feedback has been received.

As of 10 May, over £6 billion worth of loans have been issued under the Coronavirus Business Interruption Loan Scheme (CBILS) to almost 36,000 businesses.

Since the Coronavirus Business Interruption Loan Scheme was launched, Government has listened to feedback from stakeholders and made changes to ensure that loans are processed as quickly as possible to allow businesses to get the support they need. These changes include:

• Extending the scheme so that all viable small businesses affected by Covid-19 are eligible;
• Removing previous restrictions on the following groups to enable them to access the CBILS, subject to other eligibility criteria being met: Employer, professional, religious or political membership organisations and trade unions;
• Removing the ability for lenders to ask for personal guarantees for loans under £250,000, and reducing the personal guarantee for loans over £250,000 to 20% of the outstanding balance after recoveries;
• Introducing technical changes to ensure that applications will be processed faster;
• Removing the forward-looking viability test; and
• Removing the per lender portfolio cap.

Responding to concerns from larger businesses that were not eligible for the existing Government-backed loans, on 3 April, my Rt. Hon. Friend Mr Chancellor of the Exchequer announced the launch of the Coronavirus Large Business Interruption Loan Scheme (CLIBS) to support viable businesses with a turnover of above £45 million. Following feedback from businesses, banks and industry groups, the turnover cap was removed from the CLBILS.

We have also responded to feedback from smaller businesses that were struggling to access funding as quickly as they needed by introducing the Bounce Back Loan Scheme. This allows businesses to borrow between £2,000 and £50,000. To apply for the scheme businesses complete a short, simple, online application form, meaning that applications are submitted and processed rapidly, and businesses can access loans within a matter of days.

In May, the Government will launch the Future Fund which will provide between £125,000 and £5 million to businesses that might be reliant on equity investment and are therefore unable to access the current loan schemes.

The Government continues to work with the British Business Bank, HM Treasury and lenders to assess how effectively these schemes are working.