Bounce Back Loan Scheme
The Government have announced the details of an ‘easy to apply for’ bounce back loan scheme aimed at small and medium businesses in need of cash flow during this period of uncertainty.
UK based businesses that have been negatively affected by Coronavirus and which had not made accumulated losses of more than half of the business’s capital as at 31 December 2019 will be eligible to apply.
The loans provided under the scheme will range from £2,000 to £50,000 (capped at 25% of the business’s turnover) and will be 100% guaranteed by the government.
No repayments will be due and no interest or fees will be charged in the first 12 months of the loan.
The maximum length of the loan will be 6 years and the government will work with lenders to agree a low rate of interest for the remaining period of the loan after the initial 12 month interest free period.
Applications will open from 9am on Monday 4th May with the funds made available within days of the application. A short standard online self-certified application will be required for these loans and will not require the business to provide any detailed future forecasts.
Full details on the application process are expected in the next few days. It is not expected that there will be any early repayment penalty on the loans.
If the business has previously obtained a loan of up to £50,000 through the Coronavirus Business Interruption Loan Scheme (CBILS), it will be possible to transfer this to the Bounce Back Loan Scheme until 4th November 2020. However, other than this provision, businesses that have previously obtained CBILS funding will not be eligible to apply for the Bounce Back Loan Scheme as well.
The scheme is not open to banks, insurers, public sector bodies or state funded schools / grant funded further educational establishments.
Business Rates reliefs
Businesses are eligible for this relief if they are based in England and occupy properties that are wholly or mainly being used:
- as shops, restaurants, cafés, drinking establishments, cinemas and live music venues;
- for assembly and leisure; and
- as hotels, guest & boarding premises and self-catering accommodation.
Local authorities will be fully compensated for these business rates measures. The Government guidance note for local authorities contains a full list of properties able to benefit from this scheme and can be found here.
If you have any questions on this new scheme or any of the financial packages announced by the government in respect of Covid-19 please do not hesitate to contact your usual contact at RPG.
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