Car dealerships across the country have been forced to close as part of the UK’s measures to combat the Covid-19 crisis. This has dealt a massive blow to the number of new vehicle registrations in the UK 44.4% in March, compared to the same month last year. In light of this fact, the government has now extended its Coronavirus Business Interruption Loan Scheme (“CBILS”) to provide support to larger dealership groups, with a turnover of over £45m.
For larger dealership groups, the headline of the revamped CBILS means that the government will guarantee 80% of any qualifying loans made to it by a bank (up to a maximum loan value of £25m). This opens up the opportunity for dealerships to access immediate funding to help with cashflow or protective measures.
MotorTrader.com says there are more than 180 dealer groups in the Motor Trade Top 200 with a turnover in excess of £45m and the Chancellor’s changes will therefore be welcomed by dealership groups who were previously not eligible for government support. The new scheme will launch in late April and will give dealership groups access to finance products including loans up to £25m in value, other short-term loans, overdrafts, invoice finance and asset finance. This is much needed support for a sector where already slim profit margins mean that some dealership groups might not have endured this crisis without it.
Government offers loans to dealer groups with turnover between £45m and £500m