Following feedback from constituents
I have made representations to the Treasury regarding financial support for
local businesses. Some have reported a helpful response from their bank with
fair terms and low interest rates but that has not always been the case. Many
of you have been in touch citing refusals to help or unfavourable terms and
conditions. Countless businesses (who are the backbone of our Cornish economy)
and running successfully up until a few weeks ago, now have little or no work
and no income causing an immediate cash flow crisis. They face all manner of
other problems too, so they clearly need urgent help and a fair response from
their bank or other lender. I have made this known at ministerial level.
The Chancellor has acted swiftly so
that any previously viable business that has seen trade affected by the coronavirus
fallout can now directly go to the Coronavirus Business Interruption Loan Scheme
(CBILS) rather than having to apply for a standard commercial lending product
from their bank.
The revised CBILS scheme can provide loans
and credit up to £5m for smaller businesses affected by coronavirus. Business
can access different types of finance products such as overdrafts, invoice
finance, term loans, and asset finance facilities. There are other types of
help for business and there is more information in the link below. The changes
to CBILS will mean many smaller businesses can access funding. These changes
are made with immediate effect. The changes can be in certain cases
retrospectively applied to existing CBILS loans.
The requirement for personal guarantees for these loans that are below
£250,000 have also been removed. This has been a major worry for many businesspeople
who faced having to offer their home or other assets as security to get a loan
in what are extraordinarily difficult and unknown times.
Lenders are now banned from requesting personal guarantees on loans
under £250,000.
The Chancellor,
Rishi Sunak MP has made it very clear where he stands on the help business
needs and has said “We are making great progress on getting much-needed support
out to businesses to help manage their cashflows during this difficult time –
with millions of pounds of loans and finance being provided to hundreds of
firms across the country. And now I am taking further action by extending our
generous loan scheme so even more businesses can benefit. We have also listened
to the concerns of some larger businesses affected by COVID-19 and are
announcing new support so they can benefit too.
This is a national effort and we’ll continue to work with the financial services sector to ensure that the £330 billion of government support, through loans and guarantees, reaches as many businesses in need as possible.”
This is a national effort and we’ll continue to work with the financial services sector to ensure that the £330 billion of government support, through loans and guarantees, reaches as many businesses in need as possible.”
The Key points on changes to CBILS
are:
·
All viable small businesses that have been
impacted by COVID-19 can now benefit (rather than just those that couldn’t
access commercial finance)
·
No personal guarantees for loans below £250,000
·
Personal guarantees for loans above £250,000
limited to the 20% of the loan which isn’t guaranteed by Government
·
Operational changes to speed up the processing
of applications, particularly those for smaller loans
There is much more information on the
significant changes made here:
More help
and information can be found here:
I am grateful
to all of you who have contacted me regarding your business. The feedback has
been invaluable in making representations on your behalf. Apologies to those
still waiting for a reply due to the huge number of emails, letters and calls
received. I, along with my team will respond to you all in due course and I
thank you in anticipation of your forbearance.
