Application deadlines extended for emergency business loans

The government announced today that UK businesses will now have until 31 January 2021 to apply for emergency business loans, including the Bounce Back Loan Scheme, the Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme. That is a two month extension on the original 30 November deadline. The extension also applies to the Future Fund, aimed at startup businesses.

The Bounce Back Loan Scheme (BBLS)

The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.

The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.

You can apply for a loan if your business:

  • is based in the UK
  • was established before 1 March 2020
  • has been adversely impacted by the Coronavirus

If your business was classed as a business in difficulty on 31 December 2019, you’ll need to confirm that you’re complying with additional state aid restrictions.

Businesses from any sector can apply, except:

  • banks, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • state-funded primary and secondary schools

The Coronavirus Business Interruption Loan Scheme (CBILS)

The scheme helps small and medium sized businesses to access loans and other kinds of finance up to £5 million. The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.

You can apply for a loan if your business:

  • is based in the UK
  • has an annual turnover of up to £45 million

You need to show that your business:

  • would be viable were it not for the pandemic
  • has been adversely impacted by the Coronavirus

If you want to borrow £30,000 or more, you also need to confirm that your business wasn’t classed as a business in difficulty on 31 December 2019.

The Coronavirus Large Business Interruption Loan Scheme (CLBILS)

CLBILS helps medium and large sized businesses to access loans and other kinds of finance up to £200 million. The government guarantees 80% of the finance to the lender.

You can apply for a loan if your business:

  • is based in the UK
  • has an annual turnover of over £45 million
  • has not received support under the Bank of England’s COVID-19 Corporate Financing Facility, for investment grade companies.

You need to show that:

  • your business would be viable were it not for the pandemic
  • your business has been affected by Coronavirus
  • the loan will enable you to trade out of any short-term to medium-term difficulty resulting from Coronavirus

If you’re borrowing more than £50 million you must agree to restrictions on dividend payments, senior pay and share buy-backs during the period of the loan. Check the eligibility requirements.

The Future Fund

The Future Fund provides government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors.

These convertible loans may be an option for businesses that rely on equity investment and are unable to access other government business support programmes because they are either pre-revenue or pre-profit.

Your business is eligible if:

  • it is UK-incorporated – if your business is part of a corporate group, only the parent company is eligible
  • it has raised at least £250,000 in equity investment from third-party investors in the last 5 years
  • none of its shares are traded on a regulated market, multilateral trading facility or other listing venue
  • it was incorporated on or before 31 December 2019
  • at least one of the following is true:
    • half or more employees are UK-based
    • half or more revenues are from UK sales

Click here to check your eligibility.

As mentioned previously, applications for the above government-backed loan schemes and the Future Fund have been extended to 31 January 2021.

If you or a client are considering applying for the BBLS or the CBILS, please contact your usual Beavis Morgan Client Partner or email info@beavismorgan.com. If you are interested in applying for the CLBILS or the Future Fund, please get in touch with John Weeden or Karl Holmes at Beavis Morgan group company Cadence Advisory for advice and assistance.

For further information about the Government measures to protect individuals and businesses, visit our COVID-19: Support for UK businesses hub.

 

Leave Your Comment

Your email address will not be published.*