COVID-19 Financial Support Update: Extension of Deadline for Applications

01 October 2020

Author: Lynsay Black
Practice Area: Banking & Finance, COVID-19

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With the prospect of a second lockdown looming, the loan schemes currently available to support your business through COVID-19 financial uncertainty which were due to have ended or end over the coming weeks, have now been extended and aligned so that the closing date for applications is now the 30th November 2020.

A brief reminder on the key features of each scheme is set out below along with a link to our recent articles:

Coronavirus Business Interruption Loan Scheme

  • Up to £5m facility, available on repayment terms of up to 6 years.
  • 80% guarantee against the outstanding facility balance (subject to lender specific caps, please speak to your own bank for more information).
  • Interest and fees paid by Government for 12 months by way of a Business Interruption Payment.
  • Finance terms are up to 6 years for term loans and asset finance facilities and up to 3 years for overdrafts and invoice finance facilities.

https://www.carson-mcdowell.com/news-and-events/coronavirus-business-interruption-loan-scheme-explained

Bounce Back Loan Scheme

  • Loans range from a minimum of £2,000 up to 25% of a business’ turnover, subject to a maximum amount of £50,000.
  • The lender is provided with a 100% government-backed guarantee against the outstanding balance (both capital and interest).
  • The interest rate is set at 2.5% per annum and the Government will cover the first 12 months’ interest by way of a Business Interruption Payment.
  • The borrower does not have to begin principal repayments of the facility until after the first 12 months.
  • The term of the loan can now be up to 10 years (which the Government advise could cut monthly repayment amounts by up to half) and there is the ability to take a payment holiday of up to 6 months (which can only be used once, after you have made 6 repayments) or temporary interest-only periods of up to 6 months (which can be used up to 3 times).

https://www.carson-mcdowell.com/news-and-events/covid-19-the-bounce-back-loan-scheme-opens-for-applications

https://www.carson-mcdowell.com/news-and-events/bounce-back-loan-scheme-update

Coronavirus Large Business Interruption Loan Scheme

  • For larger businesses with a group turnover of more than £45 million to a maximum cap of £250 million.
  • The maximum amount available has now increased from £50 million to up to £200 million, with the maximum available under invoice and asset financing up to £50 million.
  • Facilities will be subject to 80% government backed guarantee on the outstanding balance of the facility.
  • No Personal Guarantees (PGs) are permitted for facilities under £250,000. PGs may be required for facilities over £250,000, however claims on such PGs may not exceed 20% of losses after all recoveries have been applied.
  • Repayment terms from three months up to three years.

https://www.carson-mcdowell.com/news-and-events/coronavirus-large-business-interruption-loan-scheme

For further information, eligibility and application guidelines, please see the British Business Bank website.

Should you have any questions on access to any of the loan schemes above please do not hesitate to contact a member of the Banking team at Carson McDowell who will be happy to assist.

*This information is for guidance purposes only and does not constitute, nor should be regarded, as a substitute for taking legal advice that is tailored to your circumstances.

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