Thursday, July 16, 2020

Coronavirus business support to launch today

Businesses will be able to access government support from today (Monday 23 March) to keep operating in the face of the global economic emergency brought on by coronavirus.

More than £330 billion of loans and guarantees to help firms continue operating will be available for applications from two schemes launching today.

For small and medium sized businesses, the new Coronavirus Business Interruption Loan Scheme is now available for applications. This scheme will help any viable business with a turnover of up to £45m to access government-backed finance of up to £5 million. Interest payments and any lender-levied fees for businesses will be covered by the Government for an initial period of up to twelve months.

The government will provide lenders with a guarantee of 80% on each facility to give lenders further confidence in continuing to provide finance to SMEs. The scheme is available through more than 40 accredited lenders, which are listed on the British Business Bank website.

In the first instance, businesses should approach their own provider – ideally via the lender’s website. They may also consider approaching other lenders if they are unable to access the finance they need.

Although the Budget announced that an initial £1.2bn of government-backed lending would be available through the new scheme, the government has since announced that it will be demand-led and will be resourced accordingly.

Overview:

  • Up to £5m facility: The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years.
  • 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance, subject to an overall cap per lender.
  • No guarantee fee for SMEs to access the scheme: No fee for smaller businesses. Lenders will pay a fee to access the scheme.
  • Interest and fees paid by Government for 12 months: The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
  • Finance terms: Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
  • Security: At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, the lender.

The Bank of England’s new lending facility for larger firms – the Covid Corporate Financing Facility – will also be open for applications to participate from this morning. By purchasing short-term corporate debt – known as commercial paper – the scheme provides a way to raise working capital for companies who are fundamentally strong but are experiencing severe disruption to cashflows, helping businesses across a range of sectors to pay wages and suppliers. The scheme is open to firms that can demonstrate that they were in sound financial health prior to the impact of Coronavirus. Companies who wish to use the scheme do not need to have issued commercial paper before.

The Chancellor of the Exchequer, Rishi Sunak, said: “We are working round the clock to do whatever it takes to protect our people and businesses. That means that we are not only taking unprecedented action but doing so at unprecedented speed, because we know that businesses and their employees need help now.”

Business Secretary, Alok Sharma, said: “We know that businesses are in urgent need of access to funding during these unprecedented times. The Business Interruption Scheme will make it easier for banks to lend and businesses to borrow. This will ensure that credit keeps flowing to where it is needed, when it is needed.”

Keith Morgan, Chief Executive, British Business Bank, said: “In this period of exceptional hardship for smaller businesses across the UK, it has been vitally important to get this new scheme up and running as soon as possible. Available from today, we hope this new scheme will enable lenders to provide the finance smaller UK businesses need, alongside other government measures, to help them survive the current economic disruption.”

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 lockdown having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.






Latest news

Rutland retail distributor lands seven-figure finance facility

A distributor of outdoor and country clothing to retailers across the UK and Europe, has secured a seven-figure finance facility from HSBC UK to...

Property consultancy wins contract on one of the largest ever strategic water infrastructure projects

An East Midlands property consultancy has won a contract to act as land agents on one of the largest strategic water infrastructure projects the...

New Northamptonshire office for top 40 UK accounting firm

Streets Chartered Accountants, a top 40 UK accounting firm, has opened a new Northamptonshire office at the recently opened Enterprise Centre East Northants (ECEN). The...

Grimsby Future High Streets Fund bid approved for submission

Councillors have approved the submission of a major bid to Government for £25m of funding to help regenerate Grimsby town centre. The proposals have been...

Streets provide further details on Chancellor’s key announcements

Following the Chancellor’s Economic Statement last week, Streets Chartered Accountants has released a special update providing further details on the key announcements made. In particular,...

Related news

Adzooma extends free access to its platform indefinitely

Nottingham-based digital and technology platform provider, Adzooma, will be offering free access to its entire platform for all businesses. Adzooma had previously opened up free...

Rutland retail distributor lands seven-figure finance facility

A distributor of outdoor and country clothing to retailers across the UK and Europe, has secured a seven-figure finance facility from HSBC UK to...

Property consultancy wins contract on one of the largest ever strategic water infrastructure projects

An East Midlands property consultancy has won a contract to act as land agents on one of the largest strategic water infrastructure projects the...

New Northamptonshire office for top 40 UK accounting firm

Streets Chartered Accountants, a top 40 UK accounting firm, has opened a new Northamptonshire office at the recently opened Enterprise Centre East Northants (ECEN). The...

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close