UK Expands COVID Small Business Loan Program
LONDON (Reuters) – More UK small businesses that were in financial difficulty before the COVID-19 pandemic will be able to access government-guaranteed loans following an easing of EU state aid rules , announced Thursday the Ministry of Finance.
Under pressure from European industry groups, the European Commission last month changed the rules – which Britain still follows during its Brexit transition period – to allow more small businesses to receive aid.
“We have supported businesses throughout this crisis, and today’s announcement means that even more small businesses will be able to access much needed financial support,” Small Business Minister Paul Scully said.
State aid rules originally prevented many loss-making businesses from accessing government aid, a move that under normal circumstances prevents governments from supporting uncompetitive businesses to the detriment of other businesses. country.
The UK Ministry of Finance said changes to state aid rules “would ensure that small businesses that are not insolvent or do not receive rescue aid can benefit from it, allowing them to bounce back and revive our economy ”.
More than 57,000 businesses have borrowed £ 12.65 billion in government-guaranteed loans worth up to £ 5 million each through the government business disruption loan program against the coronavirus, which is address to small and medium-sized businesses.
CBILS is open to companies with an annual turnover of 45 million pounds. The expansion of the program to “troubled businesses” – a category that includes those with heavy losses – applies to businesses with sales of less than 9 million pounds and no more than 50 employees.
Small businesses eligible for the government’s Bounce Back loan program, which loaned £ 33.68 billion, were already exempt from the financially troubled business ban.
Reporting by Andy Bruce, editing by David Milliken