Coronavirus Business Interruption Loan Scheme:Written question - 41542

Asked by Owen Thompson

Named Day

'Named day' questions only occur in the House of Commons. The MP tabling the question specifies the date on which they should receive an answer. MPs may not table more than five named day questions on a single day.

Asked on: 29 April 2020
Department for Business, Energy and Industrial Strategy
Coronavirus Business Interruption Loan Scheme
To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps he is taking to ensure that new businesses that are not yet profitable do not have their applications to the Coronavirus Business Interruption Loan Scheme rejected as a result of losses in their initial years of operation.
Answered by: Paul Scully
Answered on: 06 May 2020

The Coronavirus Business Interruption Loan Scheme is for businesses with turnover of up to £45m. For start-ups, or SMEs which have traded for less than 12 months, the lender should estimate turnover based upon the SME’s forecasted turnover for the first 12 months of trading. Turnover need not be generated with the intention of making a profit – charities and non-profit entities are potentially eligible for support.

Government has removed the forward-looking viability test that required an assessment of whether the business can trade out of the crisis. The only test that remains is whether a business was viable before Covid-19.

On Monday 20 April we announced a new £1.25 billion support package to protect start-ups and businesses driving research and development, which are one of our great economic strengths and will help power our growth out of the coronavirus crisis.

This package includes a £500 million investment fund for high-growth companies impacted by the crisis, made up of funding from government and the private sector, and £750 million of grants and loans for SMEs focusing on research and development.

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