Loan Schemes

Below you can find more information relating to the Bounce Back Loan Scheme and Coronavirus Business Interruption Loan Scheme.

NASC Bulletin – Budget Key Points – 04.03.21

The Bounce Back Loan and CBILS will end on March 31 2021. A new Recovery Loan Scheme will be launched on April 6 2021, and be open until the end of 2021. Businesses of any size can apply for loans from £25,000 up to £10 million, for any legitimate business purpose. The government will provide a guarantee to lenders of 80%. Further information can be found here.

 

Bounce Back Loan Scheme (BBLS)

More info about this scheme can be found here. Under the scheme:

• Businesses can borrow between £2,000 and £50,000, capped at 25% of turnover, with no fee to access the scheme
• The Government will guarantee 100% of the loan and there will not be any fees or interest to pay for the first 12 months
• Loan terms will be up to 6 years and no repayments will be due during the first 12 months
• Interest rates will be capped at 2.5% per annum
• Lenders are not permitted to take personal guarantees or recovery action over a borrower’s personal assets (such as their main home or personal vehicle).

To be eligible for the scheme, a business must be based in the UK, have been negatively affected by coronavirus (COVID‐19), have been trading on 1 March 1 2020, and not have been an ‘undertaking in difficulty’ as of 31 December 2019.

To apply, companies should approach a lender via its website and fill in the short online application form to self‐certify that they are eligible for a loan. You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS); however, if you would like to transfer your CBILS loan into the BBLS, you can arrange this with your lender until 4 November 2020.

 

The Coronavirus Business Interruption Loan Scheme (CBILS)

CBILS provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

Since its launch it has now been extended so that all viable small businesses are now eligible (not just those who have insufficient security). Lenders are no longer requiring personal guarantees for loans under £250,000 and for loans above £250,000 your principle private residence is excluded from any personal guarantees which may be required.

The list of lenders and further information about the scheme can be found on the British Business Bank website here.

The scheme includes no interest for 12 months, no fees and capital repayment holidays. To access the loans contact your normal bank. The lending criteria for these loans focus on whether the business was a viable business before the Coronavirus outbreak not the current situation.

The Institute of Chartered Accountants in England and Wales (ICAEW) has prepared some advice to help businesses to improve their CBILS applications which includes a list of essential things to be included. For more click here.