The Government have recently announced they will be backing a further loan of £330 billion to help UK businesses.
For SMEs, loans up to £5m with a 6-month repayment holiday will be available. This will be delivered by the British Business Bank and will form part of the Coronavirus Business Interruption Loan Scheme which was set out in last week’s budget. If you need contact details, please get in touch with our Banking and Finance specialist, Deborah Kirtley.
Many businesses, at least in the short term, maybe strong enough to withstand the financial implications of Coronavirus but some will become financially stressed very quickly.
SMEs suffering from a lack of liquidity resulting in financial difficulties at this time should consider speaking to their creditors as soon as possible and take legal advice. Financial problems can be worsened by breach of financial covenants and/or events of default occurring. Certain other provisions of loan facilities may also be affected, speaking to creditors sooner rather than later can result in waivers and forbearance.
Lenders themselves will also have to consider the impact of Coronavirus as they will need to consider how they can support a business but also protecting their own position long term. Furthermore, directors of a business in financial difficulty must understand their statutory and fiduciary responsibilities during this period of financial uncertainty.