New Loans for Small Businesses Announced
Sadly, lock down doesn’t seem to be ending soon. This means that we are going to be seeing more pressure on the economy and the chances of this being a 12-week blip to the economy with a large bounce back are getting less and less as lock down trundles on. Cheesy as it sounds, do remember that we are there to support you and your business through this difficult time.
In this email I wanted to take you through some of the new announcements yesterday by the government, plus an update on what is happening with the financial package the government announced.
We are now seeing local authorities pay the £10,000 and £25,000 grants to small businesses and the first Furlough payments come through into our clients’ accounts. If your payments haven’t arrived, please give us a call.
Use this tool to see what financial help your business can access
The government has also put together a handy tool for any business owner to see what financial help they are entitled to or can claim or access.
Government announces ‘bounce back’ microloan scheme for small businesses
Yesterday, the government announced that small businesses will get access to 100% taxpayer-backed loans. This may have something to do with the fact that the CBIL scheme was struggling to get the money out to small businesses who needed it and the banks being reluctant to lend the money!
The great news is that the scheme opens next week and is said to have been simplified to an online form, which is 2 pages in length. And unlike the previous CBIL scheme, businesses only need to show they were a viable business before the COVID-19 crisis hit, and their business is negatively impacted by COVID-19.
Let’s look at the detail of the scheme which are available:
- Loans of between £2,000 and £50,000 are available
- The government guarantees 100% of the loan
- No fees or interest to pay for the first 12 months (and the government pays the interest for the first 12 months)
- The government is working with lenders to agree a low ‘standardised’ rate of interest for years 1-6 of the loan.
- Loan terms will be up to 6 years
- It launches formally on 4th May and the cash is believed to be available within days
Only businesses who haven’t accessed the CBIL scheme can apply. However, businesses with a CBIL loan of under £50,000 can transfer it into the bounce back loan scheme and have until 4 November to arrange this with their lender.
We are seeing reported that businesses will be able to borrow up to 25% of their turnover, however, have not been able to verify this on the government’s official announcements.
Full details of the bounce back scheme can be found here.
If you would like to talk to us about accessing the bounce back loan scheme, please get in touch. We don’t yet know the full extent of the information which needs to be provided, but we would expect that your books would need to be up-to-date.