Results from the latest BCC Coronavirus Business Impact Tracker reveal the majority of businesses surveyed ahead of changes to CBILS, announced on 27 April, did not intend to seek financial support through the scheme’s bank loans.
Unsurprisingly, the appetite for loan support is still high amongst firms with the most urgent cash flow problems. What’s worrying is that many of these firms (30%) do not intend to access CBILS due to concerns they could not repay the loan.
There are also a number of firms reporting that they are not applying for a loan under CBILS because they are waiting for more clarity on how long the lockdown is going to go on for and whether there is likely to be a relaxing of existing measures or a tightening of new ones.
However, the new government Coronavirus Bounce Back loan may be an answer to getting cash to businesses on the front line.
- Bounce Back loan
- Who can apply
- Who cannot apply
- How to apply
The Bounce Back loan scheme
The Bounce Back loan scheme, which launches on 4 May, is designed to help small and medium-sized businesses to borrow between £2,000 and £50,000. The government will guarantee 100% of the loan, which will be delivered through a network of accredited lenders. There won’t be any fees or interest to pay for the first 12 months.
Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan.
This should provide comfort for those SMEs mentioned above which have so far been reluctant to get the help they need.
Who can apply for a Business Bounce Back loan
You can apply for a loan if your business:
- is based in the UK
- has been negatively affected by coronavirus
- was not an ‘undertaking in difficulty’ on 31 December 2019
Who cannot apply
The following businesses are not eligible to apply:
- banks, insurers and reinsurers (but not insurance brokers)
- public-sector bodies
- state-funded primary and secondary schools
If you’re already claiming funding under CBILS, bad luck, you can’t apply for a Business Bounce Back loan either. But, if you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.
How to apply
More information about the scheme and how to apply will be published shortly. Keep an eye on the government’s guidance pages online.
In the meantime, if you need any advice and guidance on all your business finance options please call the team today for a free consultation on 0203 327 0567 or email [email protected].
We will call you back immediately.