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

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps may be taken against a lender which is found in a periodic audit not to be passing on the economic benefits of the CBILS Guarantee to borrowers in the form of lower borrowing costs.

Under the Coronavirus Business Interruption Loan Scheme (CBILS), the Government provides lenders with an 80 per cent guarantee on each facility approved. Lenders are required to pass the economic benefit of the existence of this guarantee to the borrower through lower pricing than it may otherwise have had. As part of the accreditation process, lenders must evidence how they will pass the economic benefit on to borrowers.

Lenders also undergo periodic audits (including an audit prior to moving from a probationary to a full Lender under the Scheme) to check that scheme eligibility rules and processes have been followed. If it is determined that a lender is not passing on the economic benefits of the CBILS Guarantee to borrowers, the lender will be required to take such action as is required by the British Business Bank to rectify this. This could include compensating the borrower and / or remediating their existing book. Ultimately, the Bank could suspend the lender from new lending or remove its accreditation. Any action will take into account the impact on the underlying SMEs.