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Jersey’s government has now launched its loan guarantee scheme, backing up 80% of loans between £5,000 to £500,000 if local businesses are unable to pay it back, as a result of the covid-19 crisis.
Also agreed across Guernsey and the Isle of Man, the loan scheme itself will be offered through banks that lend to local businesses in the island.
The government is underwriting 80% of the loans equalling a total of £50million, so their guarantee will only cover £40million of this at a maximum.
To qualify for the scheme, businesses must have a turnover of less than £10 million, provided they don’t operate in any of the following industries:
It was launched, alongside other business support packages, to give confidence to banks which might be reluctant to give out new loans or overdrafts given the uncertain economic climate ahead.
The scheme is specifically for “otherwise viable businesses whose bank cannot provide credit in line with their commercial appetite."
Government guidance states: “The scheme will allow banks to extend financing to smaller businesses that are viable but unable to obtain finance under the lender’s normal requirements.”
Jersey Business is now advising local businesses that require help in making their application for a loan under the new scheme.
Pictured: A table from Jersey Business about the particulars of the scheme (Jersey Business).
Businesses that already have a relationship manager at their bank should apply through them.
Commenting on the scheme, Minister for External Relations Senator Ian Gorst said: “It is imperative that in these unprecedented times we are able to support our local businesses who require access to finance.
“The business disruption loan guarantee scheme is one of a number of measures introduced to help support local businesses and people during these difficult times. We are proud to have worked with banks locally and across the Crown Dependencies to bring this scheme into effect.”
HSBC have confirmed that they will be offering the new government-backed scheme to their island business customers.
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