Business

Northern Ireland banks sign up to roll-out Government-backed loan scheme

Chancellor Rishi Sunak.
Ryan McAleer

DANSKE Bank, Ulster Bank and Bank of Ireland have confirmed they have secured accreditation for the UK Government’s Coronavirus Business Interruption Loan Scheme (CBILS).

The initiative, which was officially launched on Monday morning, will provide government-backed loans of up to £5 million to small and medium-sized businesses.

AIB (First Trust) said yesterday it was in the process of applying for accreditation.

The UK Government has said the CBILS will assist “any viable business”, with a turnover of up to £45m. Interest payments and any lender-levied fees for businesses will be covered by the Government for an initial period of up to twelve months.

The scheme formed part of a range of measures announced by Chancellor Rishi Sunak on Friday evening, that included the offer of up to 80 per cent salary support for furloughed workers.

The Executive has also announced plans to give all Northern Ireland businesses a three-month rates holiday along with business support grant schemes of £10,000 and £25,000 for small firms.

NI Chamber chief executive Ann McGregor described the CBILS as “a significant initiative”.

“Provided by the British Business Bank, it will run for the next six months,” she said. “Offering more attractive terms for both businesses and lenders, with the aim of supporting the continued provision of finance to businesses during the Covid-19 outbreak.”

Ms McGregor said it was key for businesses to set up a communication channel with their bank or relationship manager as soon as possible.

But there appeared to be some frustration among businesses yesterday with the speed Northern Ireland lenders had responded to the opening of the scheme.

Stephen Kelly of Manufacturing NI said: “We understand things are moving fast and everyone is seeking clarity but the banks need to be showing greater levels of support for firms, more agility and an appreciation for the role they are to play in this fight.

“The Chancellor is clear, no one need lose their jobs at this point. He’s willing to pay 80 per cent of wages.

“To get there, the banks need to be providing the working capital to fund payroll in March and in April either through existing lending, other banking functions or this new CBILS,” he said.

“If the banks don’t or if they can’t access enough funding, the firms will either have to make redundancies, which is against what the Chancellor has said; continue to try to trade on, against the advice of non-essential business operation; or the business will fail, and the jobs gone too.”

Confirming the lender's involvement in the scheme, a spokesperson for Danske Bank said customers should contact their Danske relationship manager or small business adviser.

A spokesperson for Ulster Bank said: "We know that the impacts of coronavirus are being felt by Northern Ireland's businesses, and understand that the ongoing uncertainty is a worry and challenge for our customers. Ulster Bank's parent bank has been working closely with HM Treasury and the British Business Bank, and we welcome the launch of the Coronavirus Business Interruption Loan Scheme as we continue to support our SME customers through these unprecedented times.

"This is just one aspect of the wide range of support we are making available to business customers in Northern Ireland affected by the coronavirus pandemic including loan repayment holidays, interest rate reductions, temporary emergency loans with no fees, and immediate access to deposit balances with no penalty."

Bank of Ireland UK said on Monday that it is an accredited lender for the CBILS, which it said forms part of a suite of supports for business customers impacted by COVID-19.

"We are working with the British Business Bank to enable implementation as soon as possible," said a spokesperson. "We are advising business customers to get in touch with us to work through the best options for them as our assistance can include: Emergency working capital; payment flexibility on loan facilities; prioritisation of funding requests; and provision of trade finance and foreign currency products."

An AIB spokesperson said: “AIB is applying to join the CBILS.

“At AIB (NI) we’re committed to supporting our customers as the Covid-19 situation evolves.  We understand our personal and business customers (including self-employed) may have concerns regarding their finances during this period of uncertainty.

“We have a range of solutions to support our customers including working capital, and we are working to introduce repayment holidays and interest only solutions tailored to individual customers’ circumstances and financial situation.

“We’d encourage any customers experiencing difficulties or who have concerns to speak to their relationship manager, call into their local branch, contact us by phone if they have any questions, queries or requests.”

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