​Changes to the Coronavirus Business Interruption Loan Scheme Explained

03 April 2020

Author: Rachel Lewis
Practice Area: Banking & Finance, COVID-19


Following criticism of the terms of the Coronavirus Business Interruption Loan Scheme, the UK Government has announced several changes to the scheme’s key features and eligibility criteria.

The revamped scheme will be operational with lenders from 6 April 2020 and the changes should be retrospectively applied for any facilities offered since 23 March 2020.

The key changes to the scheme are outlined below:

  • Access to the scheme has been opened up to those businesses which would have previously met the requirements for a commercial facility, but would not have been eligible for a facility under the scheme. In particular, insufficient security is no longer a condition of access.
  • Lenders may not take any form of personal guarantee for facilities below £250,000.
  • For facilities above £250,000, personal guarantees may still be required (at the lender’s discretion), but these are subject to the following conditions:
    • recoveries are capped at 20% of the outstanding balance of the facility after the proceeds of business assets have been applied, with the government-backed guarantee accounting for the other 80%; and
    • a principal private residence cannot be taken as security to support a personal guarantee or as security for any facility made available through the scheme.

Further information about the scheme, including details of participating lenders, eligibility criteria and how to make an application, can be found on the British Business Bank’s website: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/