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You are reminded that applications for these two products close on 31 March 2021, so don’t delay.
Bounce Back Loans
If you have not drawn down the maximum advance under your your initial application for the Bounce Back Loan Scheme, then you should be able to request a ‘top up’ with your existing provider. Such loans up to £50,000 are 100% guaranteed by the Government (#).
Summary:
- maximum loan £50,000 or 25% of turnover, which ever is the lower
- simple application process, that is usually conducted over the internet
- no repayments, fees or interest paid during the first 12 months
- interest charged at 2.5% per annum
- initially over 72 months with no early settlement charges
- can be extended to 120 months
- flexibility to move to interest only repayments for a period of 6 months
- repayment holiday for a period up to 6 months
Coronavirus Business Interruption Loan Scheme
Businesses from any sector can apply although there are a few exceptions. The scheme helps SME’s (with turnover less than £45m) access finance up to £5m and 80% of the advance is guaranteed by the Government (#).
You will be asked for up to date financial information together with a business plan. The more you prepare the better your chances of success plus having integrated financial forecasts demonstrates credibility to potential lenders.
Summary
- covers overdrafts, term loans, asset finance and invoice finance
- Government pays the interest and any fees to the lender in the first 12 months
- interest rates and term length vary between lenders
- lenders cannot take any form of personal guarantee for facilities below £250,000
- for facilities greater than £250,000, the lender can take personal guarantees of up to 20%
- your principal private residence (home) is specifically excluded
- able to have multiple facilities with different lenders, providing conditions are met
Both BBLS and CIBLS are available through participating lenders and further information can be found at https://www.british-business-bank.co.uk
The Recovery Loan Scheme (commencing in April 2021) was announced in the March Budget and more details all be released, including the participating lenders in due course.
# directors have statutory and fiduciary duties that need to be complied with. The Government guarantee presumes applications did not contain false statements
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