The UK Chancelor of the Exchequer extends CBILS

Monday 28 September 2020 13:49 CET | News

The UK’s Chancelor of the Exchequer has reported intentions to extend the government loan schemes that have been helping SMEs stay afloat throughout the coronavirus pandemic. 

When the government announced its financial aid package to help SMEs in March 2020, it was met with controversy as it appeared fintechs and alternative lenders had been ignored. Fintechs were initially excluded from the loan schemes as only companies that had turned a profit could apply, something even the largest fintechs are yet to do, and alternative lenders didn’t become accredited lenders until a few weeks into the schemes. 

Alternative lenders and banks have distributed over USD 57 billion in government-backed Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and Bounce Back Loans and GBP 720 million has been given out from the fintech-friendly Future Fund convertible loan scheme, according to AltFi. 

The repayment period for Bounce Back Loans has been extended from six to ten years and CBILS for up to ten years, reducing the average monthly repayment to help struggling businesses. These measures are part of the new ‘Pay As You Grow’ scheme that will allow SMEs using government loan schemes to make interest-only payments or stop repayments completely for up to six months, without affecting their credit rating. 

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Keywords: UK, Chancelor of the Exchequer, CBILS, government loan schemes, SMEs, coronavirus, pandemic, financial aid, fintechs, alternative lenders, accredited lenders, banks, CLBILS, Bounce Back Loans, loans, Future Fund, convertible loans, repayment, Pay As You Grow
Categories: Banking & Fintech
Countries: United Kingdom
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Banking & Fintech