Coronovirus – Emergency Bank Loans and Overdrafts
Updated 24 March 2020
The ‘Business Interruption Loan Scheme’ is now open
Loans over 6 years. Overdrafts over 3 years. No interest for 12 months
The government announced the Business Interruption Loan Scheme (CBLIS) last week as an emergency measure to try and bank-roll businesses through the crisis.
Its now open – you can apply. Just be prepared to get in a big queue…
Banks are giving loans and overdrafts to small businesses – and the government are backing them at 80%.
For many without cash reserves it’s the only measure to keep things going.
Here are the Terms
You can borrow from £1,000 up to £1.2m
No Interest or Fees for 12 months: The Government are going to cover first 12 months of interest payments. Smaller businesses will benefit from no upfront costs and lower initial repayments.
Loans are on 6 Year Terms: Finance terms are up to six years for term loans and asset finance.
Overdrafts are on 3 Year Terms: For overdrafts, terms will be up to three years.
It’s not a Grant. You will be 100% liable for the debt: You will be expected to repay it all at 100%.
This scheme includes overdrafts and asset finance. Which means you can apply it to equipment & stock as well as everyday overheads and paying the wages.
Who is Eligible
Basically, pretty much everyone.
There is no apparent restrictions for sole-traders, partnership or limited companies.
To be eligible you must only meet these criteria:
- Be UK-based in your business activity;
- Your annual turnover must not exceed £45 million;
- You will need to have a borrowing proposal which demonstrates clearly that this money which will enable your business to trade out of any ‘short-to-medium term difficulty’ (Shouldn’t be difficult to prove under the current circumstances)
For full guidance notes go HERE
How Do I Apply?
Go directly to the bank. Go to their website. Register.
You must apply through the 40 banks who are participating in the scheme (termed as ‘CBILS’)
A full list of banks can be found HERE
The scheme opened on Monday 23 March.
Our experience: Go to the bank website. You will be put in a queue for 1-2 hours to register your details. You’re then told that the loan team will get back to you.
Call your bank and see what’s available to you.
More information from the British Business Bank: https://www.british-business-bank.co.uk/ourpartners/supporting-business-loans-enterprise-finance-guarantee/
We’re not accountants. We’re business support services.
If you need support with your financials get in touch with us – 01326 727 112