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The Coronavirus Business Interruption Loan Scheme

This is what the Government has to say.

A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch early next week to support primarily small and medium-sized businesses to access bank lending and overdrafts.

The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.

Businesses can access the first 12 months of that finance interest free, as government will cover the first 12 months of interest payments.

Eligibility

You are eligible for the scheme if:

  • your business is UK based, with turnover of no more than £45 million per year
  • your business meets the other British Business Bank eligibility criteria

How to access the scheme

The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website. All the major banks will offer the Scheme once it has launched. There are 40 accredited providers in all.

You should talk to your bank or finance provider (not the British Business Bank) as soon as possible and discuss your business plan with them. This will help your finance provider to act quickly once the Scheme has launched. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

The scheme will be available from early next week commencing 23 March.

 

All the major banks are participating in the scheme. The full list is here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/

The scheme is intended to provide security to the lender to assist them to lend.

The eligibility criteria are not fully finalised, but you must:

  • be UK based, with turnover of no more than £45 million per annum
  • operate within an eligible industrial sector;
  • be able to confirm that you have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years
  • be unable to meet a lender’s normal lending requirements for a fully commercial loan or other facility, but would be considered viable in the longer-term

If you need help in producing financial information (including forecasts and cashflows) to support a lending application, please contact us.

 

Additional Help for Business

The Government’s full Covid 19 Support for Business guidance is here:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

 

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