COVID-19 Update: More Support for Businesses Announced
14 May 2020
Has your business been adversely affected by the COVID-19 outbreak? If so, you may be eligible for one of the following business support schemes.
Coronavirus Business Interruption Loan Scheme
This scheme helps UK businesses with an annual turnover of up to £45 million to access loans and other finances up to £5 million.
The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.
To qualify you must show that your business would be viable if not for the pandemic. Additionally, for loans of £30,000 or more you must confirm that your business wasn’t classed as a ‘business in difficulty’ on 31st December 2019.
The maximum length of loans is up to 3 years for overdrafts and invoice finance facilities or up to 6 years for loans and asset finance facilities. Applications can be made at any of the main retail banks.
Coronavirus Bounce Back Loan
This scheme allows companies adversely impacted by COVID-19 to borrow between £2000 and £50,000 and access the cash within days. The scheme applies to small and medium-sized UK businesses incorporated before 1st March 2020.
The government guarantees 100% of the loan with no fees or interest to pay for the first 12 months. After this period the interest rate will be 2.5% per annum.
A majority of the main retail banks operate as lenders for the scheme. The length of the loan is 6 years and no repayment is due in the first 12 months.
COVID-19 Corporate Financing Facility
Under this scheme the Bank of England will buy short-term debt from large companies. The scheme is designed to support companies affected by a short-term funding squeeze. It will allow them to finance their short-term liabilities as well as support corporate finance markets overall and ease the supply of credit to all firms.
The scheme will operate for 12 months. Companies, and their financial subsidiaries, that make a material contribution to the UK economy being eligible.
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