The Development Bank of Wales have launched a £100 million fund to support businesses in Wales affected by the Covid-19 outbreak.
Business News Wales MD Mark Powney spoke with Giles Thorley, Chief Executive of the Development Bank, about the launch of this new fund.
Limited companies, partnerships and sole traders trading for longer than two years will be able to access loans up to £250,000 fixed at 2%, with an interest and capital repayment holiday for the first 12 months. There will be no arrangement or monitoring fees. Applicants will need to demonstrate that they were able to service the level of debt prior to the outbreak.
Minister for Economy, Transport and North Wales, Ken Skates, said:
“The Covid-19 crisis continues to affect our economy at an extraordinary pace.
“This £100m loan scheme through the Development Bank of Wales is an absolutely vital part of the £500 million Economic Resilience Fund we have just announced, and will be crucial in supporting companies experiencing cash flow problems as a result of the pandemic.
“The Welsh Government is absolutely committed to helping businesses deal with the economic impact of coronavirus – and we are responding with an unprecedented package of support for an unprecedented time.”
Applications can be made online via the Development Bank of Wales’s website developmentbank.wales. Each business can make just one application, and the loan amount will be based on the number of people employed by the business or a calculation based on profit or turnover. The Development Bank has mobilised all its teams to respond to demand and applications will be processed as quickly as possible.
To prove serviceability, applicants will need to provide three months bank statements for loans of £5,000 up to £100,000. Two years annual accounts, management information and a cash flow forecast will also be required for loans of £100,000 to £250,000. Security taken will be a 20% personal guarantee to a maximum of £25,000 for all investments, and for deals over £100,000 a debenture will also apply.
Giles Thorley, Chief Executive of the Development Bank of Wales, said:
“Covid-19 is seriously impacting the lives of every individual in the country and damaging our prospects. We must do all that we can to protect our small and medium-sized businesses, who are the lifeblood of our economy in Wales.
“Working with the Welsh Government, we have moved quickly and decisively to make this fund available to support businesses through these challenging times.
“A range of financial and other support measures have been announced by the Welsh and UK Governments in recent weeks, and I would encourage small business owners to review all options available and where possible take advice.
“It’s a long road ahead, but with the right support from government and the Development Bank of Wales, we can all play our part in keeping businesses safe, safeguarding jobs, and protecting those that are most vulnerable to the economic downturn.
The fund works alongside previously announced UK-wide measures such as the Coronavirus Business Interruption Loan Scheme, which is managed by the British Business Bank and delivered by a network of accredited partners including high street banks.