‘Quick and easy-to-access’ loans worth up to £50,000 to help small businesses who have seen a loss of revenue and a disruption to their cashflow due to the coronavirus crisis.
Whilst most banks were inundated and crashed within hours of the launch, it is worth hanging in there and trying again as clients have received loans of £50,000 within days of their applications. We have also been informed that the application process is very easy.
The details are below:
- A six year term loan of up to 25% of annual revenue with a minimum of £2,000 up to a maximum amount of £50,000
- The scheme gives lenders a 100% government-backed guarantee against the outstanding balance of the loan
- The borrower remains 100% liable for the debt
- No repayments need to be made within the first 12 months and the loan will be interest free
- The interest rate is set at 2.5% per annum
- Early repayment is allowed without incurring early repayment fees
- Lenders are not permitted to take any form of personal guarantee
Amongst other criteria UK businesses are eligible if:
- they have lost revenue as a result of the coronavirus pandemic, as long as they can prove this came about after 31st December 2019
- they are not currently going through bankruptcy or liquidation proceedings
- more than 50% of their income is from trading activity
Further information can be found here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/for-businesses-and-advisors/
There was also the announcement of an extra £617million being made available to councils as a top up to the local grants fund scheme. This is being made available to small businesses with less than 50 employees, not eligible for the business grants, with specific priority for businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. There are three levels to this grant: a maximum of £25k, £10k and under £10k to be decided at the discretion of the of the local authorities.
Further details can be found here: https://www.gov.uk/government/news/top-up-to-local-business-grant-funds-scheme