Posted by jonathanfullarton - November 13, 2020 10:35 am Coronavirus Business Loans & Finance

Support for businesses through the Coronavirus Business Interruption Loan Scheme

Support Grants for businesses in England – an update

(updated 12 November 2020)

The government has today released more information on support grants available for businesses located in England during the pandemic.

Coronavirus grant due to national restrictions (for closed businesses):

The Local Restrictions Support Grant (LRSG (Closed) Addendum) will support English businesses required to close due to national Covid-19 restrictions.  LRSGs will be available from 5 November until 2 December 2020.

Eligible businesses may be entitled to a cash grant.  Enquiries and applications should be made through your local council for every 28-day period under national restrictions.

For more information and to check your eligibility click here.

Coronavirus Local Restrictions Support Grant (for closed businesses):

Businesses in England that were required to close due to local restrictions (local COVID alert level: Very High) may be eligible for the local restrictions support grant. Eligible businesses are entitled to a cash grant from their local council for each 14-day period they are closed.

 For more details click here.  

Coronavirus Local Restrictions Support Grant (for open businesses):

The LRSG (Open) meanwhile, supports businesses severely impacted due to temporary local restrictions. This grant may be available for businesses which have not had to close but which have been severely impacted due to local restrictions (Local COVID alert levels: High or Very High).

This grant can also be claimed through your local council.  Claims should be made for each 28-day period under local restrictions.

To check your eligibility and for further information, click here.  

Coronavirus Additional Restrictions Grant (ARG):

ARG supports those businesses not covered by other grant schemes or where additional funding is required.  This scheme provides local councils with grant funding to support closed businesses that do not directly pay business rates as well as businesses that do not have to close but which have been impacted by Covid-19.   In addition, larger grants can be given than those made through LRSG (Closed).

Click here to check your eligibility and for further information.

Nightclubs, dance halls or adult-entertainment businesses

If you businesses falls within these sectors you can also check if your business is eligible for a coronavirus grant due to national restrictions: Businesses in England that have been required to close due to the national restrictions introduced in March 2020, and have not been able to re-open, may be eligible for Local Restrictions Support Grant. If your business is eligible, you will be entitled to a cash grant from your local council for each 14-day period your business is closed.

For further information and to check your eligibility, click here. 

New Guidance

The Coronavirus Bounce Back Loan:

The Bounce Back Loan Scheme is designed to enable smaller businesses to access finance more quickly during the coronavirus outbreak.

updated: 12 February 2021

Anyone who took out a Bounce Back Loan will now have the option to make payments to meet their individual circumstances. New Pay as You Grow repayment flexibilities will provide businesses with the following options to:

• extend the length of the loan from six years to ten
• make interest-only payments for six months, with the option to use this up to three times throughout the loan
• pause repayments entirely for up to six months

The scheme is open to applications until 31 March 2021. Apply for a coronavirus Bounce Back Loan.

Please note that new options are available to top up existing loans, extend the loan period, make interest-only repayments, or pause repayments.

The scheme is open to applications until 31 March 2021. For more details about the Bounce Back Loan click here.

Claiming Statutory Sick Pay (SSP) paid to employees during the pandemic

Use the online service to check eligibility and claim back SSP.  The online service is available now.

For further details click here.  

Restaurants, pubs and cafes – the extension of takeaways

Businesses in this sector have been given automatic freedom to provide takeaway services for another year. This has been extended until 23 March 2022.

For more details click here.

HRC Briefing document

HMRC have issued a briefing on how they will work with customers and stakeholders over the coming months, while COVID-19 continues to impact the country.  You can view that briefing here.

For further help with grants and loans please contact your local MFW office for further help.

Update – Winter Economy Plan

On 24 September, Chancellor Rishi Sunak addressed the House of Commons with his Winter Economy Plan. His plan sets out further Covid-19 measures as we head towards the winter season.  Part of the measures announced will provide businesses who took out a Bounce Back Loan with the option to repay their loan over a period of up to ten years through a new Pay as You Grow flexible repayment system. This will provide interest-only periods of up to six months and payment holidays to businesses.

Coronavirus Business Interruption Loan Scheme lenders will be given the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.

The government is extending four temporary loan schemes to 30 November 2020 for new applications: As a result, more businesses will now be able to benefit from the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund.

For the details announced so far please read our dedicated Winter Economy Plan blog.

On this page we look at some of the loans available to businesses including:

Types of Schemes

• The Coronavirus Business Interruption Loan Scheme
• The Coronavirus Large Business Interruption Loan Scheme
• Covid Corporate Finance Facility
• Business Bounce Back Loans

The Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme (CBILS) helps small and medium-sized businesses affected by Coronavirus to access loans and other finance of up to £5 million.

Government guarantee

The government will guarantee 80% of the finance to the lender and will pay the interest and any fees for the first year.

Eligibility

You can apply for a loan if your business:

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

Who cannot apply

Businesses from any sector can apply, except:

• banks, insurers and re-insurers (excluding insurance brokers)
• public-sector bodies
• state-funded primary and secondary school

Loan duration

The maximum duration will depend upon the type of finance applied for. This is:

• up to 3 years for overdrafts and invoice finance facilities
• up to 6 years, for loans and asset finance facilities

How to apply

Over 50 lenders, including all the main retail banks are participating in the Coronavirus Business Interruption Loan Scheme. To apply for a loan you should go direct to one of the participating lenders.

You’ll need to tell the lender:

• the amount you’d like to borrow
• what the money is for
• how long you’d like to pay it back

You’ll need to provide documents that show you can afford to repay the loan.

These may include:

• management accounts
• cash flow forecast
• business plan
• historic accounts
• details of assets

The Government issued an update on 30 July to change state aid rules as a result of government and industry lobbying. This will allow more small businesses to benefit from loans of up to £5 million under the Coronavirus Business Interruption Loan Scheme (CBILS).

Previously businesses which were classed as ‘undertakings in difficulty’ were unable to access CBILS because of EU rules. However due to these changes businesses that fall into category, have fewer than 50 employees and a turnover of less than £9 million can apply to CBILS.

For more details please view the UK Government press release.

How MFW can help

We can help you prepare supporting documents to assist in your application for the Coronavirus Business Interruption Loan Scheme. For more help and advice contact your local MFW office.

The Coronavirus Large Business Interruption Loan Scheme

Medium to larger UK businesses affected by Coronavirus with turnovers greater than £45m may be eligible for loans up to £200m through The Coronavirus Large Business Interruption Loan Scheme (CLBILS) is available through a range of British Business Bank accredited lenders and partners.

For more information about the Coronavirus Large Business Interruption Loan Scheme visit the British Bank website.

What is the COVID-19 Corporate Financing Facility (CCFF)?

HM Treasury, together with the Bank of England have announced a new COVID-19 Corporate Financing Facility (CCFF) to provide additional help to firms to bridge through the Coronavirus pandemic to help assist with COVID-19 related disruption to businesses’ cash flows.

The COVID-19 Corporate Financing Facility (CCFF) will provide funding to businesses by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy. 

Terms

The facility will offer financing on terms comparable to those prevailing in markets in the period before the COVID-19 outbreak and is to businesses that can demonstrate they were in sound financial health prior to this time. 

How long will the CCFF scheme operate?

The scheme will initially operate for at least a year and for as long as needed to relieve cash flow pressures on firms that make a material contribution to the UK economy. 

By providing an alternative source of finance for a wide range of companies, the scheme will help to preserve the capacity of the banking system to lend to other companies, including small and medium-sized enterprises, which rely on banks.  :

The government ave also issued guidance on applying for the COVID-19 Corporate Financing Facility (CCFF)

Bounce Bank Loan Scheme (BBLS)

What is the Bounce Back Loans Scheme and am I eligible?

The government introduced a new 100% government backed loan scheme on 4 May to help small businesses needing cash injections to keep operating small business during the Covid-19 pandemic.

Under this scheme, businesses will be able to borrow between £2,000 and £50,000 via accredited lenders up to a maximum of 25% of their turnover.  For the first year, the loans will be interest free and no repayments will be due during this initial period.  The scheme went live on 4th May.

How does BBLS work?

BBLS is available through a range of British Business Bank accredited lenders and partners, listed on the British Business Bank website.

A lender can provide a six-year term loan from £2,000 up to 25% of a business’ turnover with a maximum loan capped at £50,000. The scheme provides lenders with a 100% government-backed guarantee against the outstanding balance of the facility (both capital and interest).

This is, however, a loan and not a grant and therefore the borrower is liable for the debt.

Key features of BBLS

• Access to finance of up to £50,000                                      
• A government backed guarantee for the lender, to encourage them to lend     
• The Government will make a Business Interruption Payment (BIP) to cover the first 12 months of interest payments.                                                           
• The loan benefits from an affordable interest rate set at 2.5% per annum
• The length of the loan is six years but early repayment is allowed, without incurring early repayment fees.
• Lenders are not allowed to take personal guarantees or take recovery action over a borrower’s personal assets (such as their main home or personal vehicle).                       
• There is no fee to access the scheme for either businesses or lenders.

How to apply for a Bounce Back Loan

The loans should be easy to apply for through a short, standardised online application.

Interest rates after first year

The government has also promised that it will work with lenders to ensure loans will be delivered as quickly as possible and that lenders will agree a low standardised level of interest for the remaining period of the loan.