In response to the coronavirus pandemic, the UK government announced “£330 billion of guarantees,” which is divided into two schemes: the Covid Corporate Financing Facility and the Coronavirus Business Interruption Loan Scheme.
The facility is the Bank of England purchasing commercial paper issued by large companies to eligible financial institutions.
It is available to companies with the following characteristics, among others:
The commercial paper is issued to an eligible financial institution, which then sells the commercial paper to the Bank of England. The minimum issue is £1 million. Maturity is one week to 12 months.
The scheme supports SMEs’ access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to six years. The UK government provides an 80% guarantee.
It is available to borrowers with the following characteristics, among others:
In practice, this likely means that the borrower needs an existing banking relationship with one of the eligible lenders for this scheme (see the British Business Bank website).
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