This morning the chancellor of the exchequer announced plans to strengthen the support for businesses affected by the coronavirus crisis by adjusting the business interruption loans and announced a new scheme for larger companies.
The current loan scheme will be extended so more small businesses can benefit. The Coronavirus Business Interruption Loan Scheme (CBILS) will now support “all viable small businesses affected” by the virus, and “not just those unable to secure regular commercial financing”. The press release announcing this can be found here.
In response, the Law Society of England and Wales has issued the following statement:
“The strengthening of the Coronavirus Business Interruption Loan Scheme is a necessary step to shore up vital parts of the economy,” said Simon Davis, president of the Law Society of England and Wales.
“Law firms face a dramatic plunge in income as work falls away. There are also widespread concerns over liquidity and the ability to meet liabilities and taxes.
“It is heartening that government appears to have acted upon many of our recommendations to support the legal services sector. Increasing the turnover threshold, removing the need for personal guarantees and the requirement to have exhausted commercial sources of credit first, are all significant steps which will be of considerable benefit.
“Despite the changes, there are still fears that sole practitioners or freelance solicitors may fall through the cracks. These practitioners are particularly exposed – often with significant cashflow concerns - and their survival is key to a wide-range of the public whose concerns they look after.”
“It is of crucial importance to the economy that the legal services sector can continue to function through this challenging period - to support commercial transactions, provide bespoke advice to business, and to facilitate access to justice whilst upholding the rule of law.”