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PROPOSAL FOR COVID RECOVERY CASHFLOW LOANS TO COUNCIL WHOLLY-OWNED COMPANIES
The Leader of the Council
agreed the recommendations as outlined above namely:
- To
note the progress Council Wholly Owned Companies are making in
respect of producing Covid recovery plans.
- To
approve the creation of a Covid Recovery Fund of up to £20m
plus a 20% contingency of £4m, such funds to be ringfenced
for Council Wholly Owned Companies from within the previously
established Business Loans Fund
- To
require that Wholly Owned Companies requesting cashflow support are
able to demonstrate a cumulative breakeven income and expenditure
position by the end of year 5 (current year plus 4) of their
recovery plan or as close as possible to this term.
- That the loans are tailored to the individual circumstances of
the company and its recovery plan, that loans may be offered on
either:
a)
an interest-only basis with balloon principal
repayment; or
b)
monthly repayments of interest and
principal.
- That loans are offered at a fixed rate over 5 years, thereby
providing the Wholly Owned Companies with certainty over future
repayments requirements, but consequentially the Council carrying
the risk of adverse interest rate movements.
- That temporary cashflow loans on existing agreed terms be
offered to Wholly Owned Companies until approvals for a Covid
recovery cashflow loan on the above terms are in place, such
temporary cashflow loans to be repaid from the Covid recovery
cashflow loan when issued.
- That all Wholly Owned Companies loan agreements be reported to
the Business Loans Fund Panel with the authority to approve loans
to individual companies and agreement of terms on a case-by-case
basis within the principles set out above to be delegated to the
Director of Resources, except that in the case of Lancashire
Management Operations Limited, to avoid a conflict of interest,
this authority to be delegated to the Chief Accountant.