Banks are well-placed to support firms who need to re-invest, says leading industry figure

Stephen Pegge, the managing director for commercial finance at UK Finance, the trade association for the UK banking and financial services sector, said the crisis provided an opportunity to find different ways of working with bosses who are feeling anxious about accessing cash.

He said: “Unlike the financial crisis, the banks are incredibly well capitalised and are well placed to deal with what could be a short sharp crisis.”

Banks and other finance providers have said they recognise that the cashflow of small and medium sized businesses may be disrupted by the impact of the coronavirus pandemic.

UK Finance said the banking and finance industry is committed to supporting viable businesses so they can continue to trade through these uncertain times.

Banks and lenders remain open for business and are well placed to support all businesses, including sole traders, who are looking for support, UK Finance said.

The Coronavirus Business Interruption Loan Scheme (CBIL), announced by the Chancellor Rishi Sunak earlier this month, has been developed and extended to businesses with a turnover of up to £45 million.

The scheme has been designed to help businesses manage their finances as the economy faces serious disruption due to the pandemic.

It aims to support those SME (small and medium-sized enterprise) businesses that were trading successfully before the coronavirus pandemic but may now experience lost or deferred revenues.

Mr Pegge added: “Forty lenders are involved in the launch of CBIL. Businesses will need access to cash quickly to re-invest, if for example, they wanted to start manufacturing ventilators.”

The CBIL scheme provides lenders with Government-backed guarantee of 80 per cent on losses that may arise, on facilities of up to £5 million, in cases where a lender would not otherwise be able to provide finance to a business.

Lenders may require security for the facility. For facilities above £250,000, the scheme requires that lenders must take security over available assets.

Where the facility is for less than £250,000 the scheme requires that banks follow their normal credit policies by taking security as appropriate.

For further information visit: https://www.ukfinance.org.uk/coronavirus-business-interruption-loan-scheme

The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

The scheme is a part of a wider package of Government support for UK businesses and employees.

The British Business Bank operates CBILS via its accredited lenders.

There are more than 40 of these lenders currently working to provide finance. They include high-street banks and asset-based lenders.