AN EAST LANCASHIRE law firm has set up a dedicated team to help businesses secure emergency loans quicker during the coronavirus crisis.
Clitheroe-based Harrison Drury has established its rapid response team following reports some businesses had been unable to access loans from the government’s Coronavirus Business Interruption Loan Scheme (CBILS) scheme quickly enough.
Harrison Drury say they can help businesses get their hands on the emergency loans faster, delivering advice on the loan agreement and completing any necessary documentation in a matter of days. The firm’s working capabilities have been unaffected by the lockdown due to its investment in a cloud-based IT network which allows its team to work remotely.
The firm’s coronavirus loans rapid response team is headed up by head of corporate David Filmer and includes members of its corporate and property teams.
Executive chairman John Chesworth said: “CBILS has the potential to provide a lifeline for many businesses, but even after a loan application has been approved, an obstacle can be presented getting through the legalities of advice on the loan documents and completing any security the bank may require. In some circumstances this can take many weeks.
“We welcome the government’s intervention that will make it easier for the banks to provide these loans. We already have strong relationships with the banks and the other funders approved to provide loans under CBILS and other channels.
“We can help businesses streamline the legal formalities associated with the loan process, allowing the work to be completed in a matter of days, even when there are property charges to secure, where banks are willing to accept ‘no search’ insurance which speeds up the process.”
CBILS is a government-backed loan scheme aimed at supporting SMEs by providing access to asset finance facilities of up £5 million for six years.
Under the scheme, the government will also make a Business Interruption Payment to cover the first 12-months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
In response to reports some businesses were initially finding difficult to access loans under the scheme, chancellor Rishi Sunak has announced a number of changes. In the revamped scheme, personal guarantees cannot be taken for any facilities below £250,000 and insufficient security is no longer a condition to access funding.
Personal guarantees may still be required for facilities of more than £250,000 but they are capped at 20 per cent. Additionally, a principal private residence cannot be taken as security to support a personal guarantee or as security for a coronavirus business interruption loan-backed facility. Operational changes are also being made to speed up lending approvals.