Two loan agreements which support Isle of Man businesses that have been impacted by the COVID-19 pandemic by providing access to working capital, have been amended to allow greater flexibility for businesses and partner banks.
The Disruption Loan Guarantee Agreement (DLGA) provides up to £60 million through five of the Island’s commercial banks, 80% of which is underwritten by the Isle of Man Government.
The Working Capital Loan Agreement (WCLA) provides credit facilities of up to £10 million, 100% of which is underwritten by the Isle of Man Government, which acts as a further safety net for those businesses who cannot access working capital via their banks or do not qualify for assistance via the Disruption Loan Guarantee Arrangement.
Both agreements have been amended to provide the ability to consolidate existing (COVID) business debts, being crown debts, utilities, suppliers but not directors loans/unregulated lending/other bank debts etc. and only those debts accumulated since 1st March 2020.
It will also ensure that the banks have the ability to refinance internally existing loans made by themselves to their customers under the DLGA and WCLA where they are approached for additional working capital assistance/or debts under the above – thereby providing their client with a single new loan incorporating the existing loan and adding in the new working capital element/additional debt – and basically allowing the new loan to start again and further ease cash flow.
These changes will be made shortly and further information will be made available at: https://covid19.gov.im/businesses/funding-support/
Treasury Minister Alfred Cannan, commented:
’These arrangements have so far supported 102 businesses with loans totalling £5.5m – and supporting over 900 jobs. The purpose of these amendments is to recognise that businesses need a longer period over which to fund accumulated cash flow pressure arising from Covid-19’.’