Government Coronavirus financial support business owners – loans

simon

Simon Misiewicz

22nd October 2020

Business Support - Coronavirus Business Interruption Loan Scheme (CBILS) 

See more details from The British Bank about Coronavirus Business Interruption Loan Scheme (CBILS) to see what financial support the government may provide to your business.

Government support, loans, and grants, eligibility 

The government will provide small/medium businesses, charities and not for profits with financial support as a result of the coronavirus. This will provide 2 million businesses with up to £2 billion to cover the costs of large-scale sick leave. The government will provide the following:

 

– Loans up to £5m

– Interest-free for 12 months

 

Eligibility of the coronavirus business interruption loan

– Fewer than 250 employees

– Be UK based, with a turnover of no more than £45 million per annum

– Operate within an eligible industrial sector

– Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years

– Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements

The loan application will start from 23rd March 2020. You can start the application for the Business Interruption Loan today

Business Support - Bounce Back Loans (BBLs)

There is some good news for those that were unable to obtain The British Bank about Coronavirus Business Interruption Loan Scheme. A new loan has been introduced by the government called The Bounce Back Loan. This loan facility allows businesses to get finance in place between £2,000 and £50,000.

You can apply to borrow up to £50,000 or 25% of your turnover in the 2019 calendar year, whichever is the lessor.

The government are backing the loans 100% compared to a riskier option of the Business Interruption Loans Scheme, where banks had to take on some of the risks. This is a much better for the banks to provide the Bounce Back Loans. Loans may be switched over to the more favourable terms of the Bounce Back Loans if businesses have obtained the Business Interruption Loans Scheme of £50,000 or less.

The 2.5% interest rate after the first 12 months of the loan is much less than that of the Business Interruption Loans Scheme.  No capital or interest payments are required for anyone securing this loan.

The Bounce Back Loan does have a criterion to be met by individuals, but it is not as difficult as the Coronavirus Business Interruption Loan (CBILS). The criteria for the Bounce Back Loan are as follows:

– Is based in the UK
– Has been negatively affected by the coronavirus situation
– Was established on or before 1 March 2020

There are some types of businesses that are not allowed to apply for the loan:

– Banks, insurers and reinsurers (but not insurance brokers)
– Public-sector bodies
– State-funded primary and secondary schools

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