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Question on Development Bank for Wales loans personal guarantees in early COVID

We have seen some personal guarantees (PGs) signed by directors of companies in early COVID to support business lending by the Development Bank for Wales (“DBW”) that occurred in early April 2020 for Covid support.

The lending refers to a “subsidised loan in accordance with the European Commission’s Temporary Framework for State Aid measures to support the economy in the current Covid-19 outbreak”. However, the terms of the loan had almost exactly the same structure as the CBILs loans provided by the UK government, except that DBW insisted on a personal guarantee for 20% of the monies borrowed, even if the amount was lower than the £250k minimum lending that a PG could be requested.

In relation to the European Commission’s framework, the UK had formerly ceased to be a member of the EU in January 2020, and there is no reference to the UK or Welsh governments applying or being approved for aid under that European framework. The loan agreements we have seen were signed after the UK government had announced that no PGs should be attached to CBILs lending below £250k.

The companies providing the loans are variations on DB Investments (10) Ltd, all are ultimately controlled by the Welsh Development Bank plc, a non-listed public limited company that receives capital funding from the Welsh Government.

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