This is where we are with the various government schemes announced to date – money does seem to be flowing through the system now.
Government Loan Schemes – new and revisited
Bounce Back loans
- Businesses will be able to borrow between £2,000 and £50,000.
- Loans will be interest free for the first 12 months.
- The loan is 100% guaranteed by the government.
- All firms trading as of March 1.
- Not in ‘difficulty’ (no definition) on 31 December 2019.
- Negatively affected by Covid19.
- Borrowers will fill in a two-page on-line application form in which they will certify that they have a viable business, lifting obligations on lenders to carry out their own checks.
- Loan terms are up to six years.
- Banks will no longer require forward financials or business plans.
- You can’t apply if you’ve already had a coronavirus business interruption loan but you can port your existing loan of up to £50,000 across.
- Availability of the application form is due to be 4th May.
- Cash is supposed to be provided in a matter of days by your bank.
It seems that the loans are limited to 25% of turnover but no indication if that’s based on historical accounts/tax returns/banked receipts.
Coronavirus Business Interruption loans (CBILS)
- Aimed at small and medium businesses.
- Your business must generate more than 50% of its turnover from trading activity.
- UK based businesses with up to £45m turnover.
- Used for business purposes and the business must have been adversely impacted by the Covid19.
- Not have been classed as a “business in difficulty” on 31 December 2019.
- Process as per usual bank loan application.
- Borrow up to £5m.
- 6 years for loans or asset finance
- 3 years for overdrafts and invoice finance.
- Bank will request security.
- If you have no security the government will guarantee 80% with the bank risking 20% – that is why the banks prefer full security from the business. So the process is risk averse and consequently many applications are rejected.
Future Funds loans
- Quite restrictive from basic details given so far.
- Already had £250,000 investment from 3rd parties in last 5 years
- Government will match new investment with upto 50% of the financing required.
- Unlisted UK company with substantive UK economic interest.
- Between £125,000 and £5,000,000 available per loan.
- Used for working capital requirements NOT staff bonuses or repaying other borrowings.
- The loan may convert to equity in given circumstances.
- Loan repayable within 3 years.
- Starts sometime in May initially to end of September 2020.
- £250,000,000 to be made available.
Payments are now being received. Seemingly within 6 working days of filing the claim.
- Annual payrolls these can now be claimed.
- As long as employee was notified to HMRC before 19 March 2020
- Even if the last payrun was in March 2019.
Self-employed income support scheme:
Information should be coming from HMRC to all those eligible in the next couple of weeks.
See our newsletter dated 17 April 2020 for details on eligibility as we have them at present.
Small Business Grants and Retail, Hospitality and Leisure Grants
These are based up on your rates bills and administered by your local authority.
Any business/charity who rates bill is £15,000 or less per annum is entitled to £10,000 – remember you may not pay any rates as there is relief of 100% for smaller businesses but you are still entitled.
Any business in Retail, Hospitality and Leisure with a rates bill between 15,001 and £51,000 is entitled to £25,000.
These seem to have generally been paid – if you haven’t received your entitlement get in touch with your local authority asap.