Latest government announcement to help SME businesses
On 27 April 2020, Chancellor Rishi Sunak announced the Coronavirus Bounce Back Loan Scheme (“the Scheme”), to support small and medium sized businesses affected by the Coronavirus. These businesses will be able to apply for a loan of up to £50,000 which will be backed by a 100% Government guarantee.
The Scheme has been introduced to speed up the application process and to get money to eligible businesses quicker than has been the case with the Coronavirus Business Interruption Loan Scheme (CBILS).
Interaction with other Government support
Businesses cannot apply for the Scheme if they are already receiving support under CBILS. However, if the support received under CBILS is less than £50,000 and you would like to transfer it under the Scheme, this can be arranged with your CBILS lender until 4 November 2020.
Summary of Scheme
- Open to eligible small and medium sized business
- Loans between £2,000 and £50,000 based on a percentage of the business’ annual turnover
- Loan term of up to 6 years
- 100% Government guarantee
- No fees to take out the loan
- No interest for first 12 months and the Government will work with lenders to agree a low rate of interest for the remaining term
- No capital repayments in the first year
In the same way as CBILS, the Scheme will be delivered through a network of accredited lenders, including the high street banks.
The eligibility criteria is similar to that for CBILS with some important relaxations as businesses no longer need to show they are commercially viable going forward just that they were not an ‘undertaking in difficulty’ at 31 December 2019 and have been negatively affected by Coronavirus.
The criteria are:
- A UK based business
- Negatively impacted by coronavirus
- Not an ‘undertaking in difficulty’ on 31 December 2019
- Not operating in the following sectors:
- Banks, insurers and reinsurers (but not insurance brokers)
- Public sector organisations, including state-funded primary and secondary schools and grant-funded further education establishments.
How to apply
The Scheme will launch on 4 May 2020 and the Government will publish more information before then, which we will update you on as soon as we receive further details.
For more information
For more information on the Coronavirus Bounce Back Loan scheme, please contact us on: