Further support for businesses announced by the UK Government
The UK Government has announced a range of measures aimed at helping viable businesses by setting up three loan support schemes:
- Coronavirus Business Interruption Loan Scheme (CBILS) offering loans, overdrafts, invoice finance and asset finance of up to £5 million for SMEs with turnover of up to £45m; interest free for 12 months. UKG provides lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims). There are 40 accredited lenders able to offer the scheme, including all the major banks.
- Coronavirus Large Business Interruption Loan Scheme (CLBILS) will provide a government guarantee of 80% to enable banks to make loans of up to £25m to businesses with turnover of between £45m and £500m, at commercial interest rates. The new scheme will launch later this month and will support a wide range of businesses to access finance products including short term loans, overdrafts, invoice finance and asset finance. Lending Facility at BoE for larger firms - under the new COVID-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger companies. This will support a company if it has been affected by a short-term funding squeeze, and allow you to finance your short-term liabilities. It will also support corporate finance markets overall and ease the supply of credit to all firms.
- Payments of VAT and SA income tax have been deferred to further aid businesses’ cash flows.
The UK Government’s Coronavirus Job Retention Scheme is open for applications and employers can apply for grants through the HMRC’s online portal. The job retention scheme allows employers to claim for up to 80% of a furloughed employees wages, capped at £2,500 a month. A one month extension has been announced to the scheme and it will be open until the end of June, to reflect continuing lockdown measures. Find out more information.
Bounce Back Loan boost for small businesses
The UK Government has announced a new fast-track finance scheme, Bounce Back Loans scheme, which strengthens the existing support currently available for small businesses affected by the Covid-19 pandemic.
The scheme will:
- provide loans with a 100% government-backed guarantee for lenders
- be interest free for the first 12 months
- allow businesses to borrow between £2,000 and £50,000
- make the cash available within days
- allow for no repayments to be due during the first 12 months
The scheme is designed to provide the smallest businesses with urgent, vital cash injections to continue operations. The Bounce Back Loan scheme will launch for applications on Monday 4 May 2020.
Applicants can apply easily online by completing a short, standardised form and will be able to access these loans through a network of accredited lenders.
The government will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.