Covid-19 business loans must do more for industry
The Government’s Coronavirus Business Interruption Loan (CBIL) scheme is unsuited to many businesses in the food industry and can do more to help those struggling as a result of the pandemic, according to National Farmers Union (NFU) deputy president, Stuart Roberts.
The scheme was developed by the Government to aid small and medium sized businesses with an annual turnover of no more than £45 million. It allows these businesses to access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to 6 years.
The Government said it would provide lenders with a guarantee of 80% on each loan to give lenders further confidence in continuing to provide finance to small and medium-sized businesses, although this rate is expected to be be extended to 100% for micro-SME’s by Chancellor Rishi Sunak.
Business Interruption Payments will also cover the first 12 months of interest payments and any lender-levied fees. This means smaller businesses will benefit from no upfront costs and lower initial repayments.
Despite welcoming the support scheme, NFU deputy president, Stuart Roberts, said more must be done for the farmers and the food industry.
“The Government’s Covid-19 financial support package is already providing vital assistance for distressed businesses and its workers,” said Roberts. “However, the Coronavirus Business Interruption Loan scheme is unsuited to many affected farm businesses.
“The NFU has discussed these concerns with the CBI and other business groups and supports the further reforms now suggested by the CBI. Increasing the loan guarantee to 100% and extending the repayment period would make this critical assistance a better fit for farm businesses who find the current scheme impractical and unaffordable.”