CORONA VIRUS BUSINESS INTERRUPTION LOAN SCHEME
On 17th March 2020, the Chancellor Rishi Sunak announced further measures to support the economy. He said COVID-19 is “a public health emergency but also an economic emergency”, “will do whatever it takes” and “will go much further in the coming days”.
A key measure included the launch of COVID-19 (Coronavirus) Business Interruption Loan Scheme.
The Chancellor confirmed between £1,000 to £5 million will be available for SMEs via the COVID-19 (Coronavirus) Business Interruption Loan Scheme from 23rd March 2020.
The loan will now be interest-free for the first 12 months (the government will cover the first 12 months of interest payments) and can be applied for via over 40 accredited lenders including the big four banks — Barclays, HSBC, Lloyds and RBS.
It is our understanding that the Business Interruption Loan Scheme will be available for viable businesses with a turnover under £41 million, but are unable to obtain finance due to having insufficient security to meet the lender’s normal requirements.
Government guarantee to cover 80%, with the banks retaining residual 20% risk. Banks may request Personal Guarantees (PGs) on the loan not covered by the government. Almost all business sectors are eligible, however, there are a small number of excluded/restricted sectors.
We highly recommend preparation of the following documents if you are thinking of applying for a loan.
- Cash flow statement showing the impact of COVID-19 over the next 3-6 months
- Profit and loss predictions with and without the impact of COVID-19
- Latest year-end accounts,
- Latest management accounts.
Our technical team is here to help you.
Give us a call on 0208 1234 768 or email us [email protected]