By Funding Options on Small Business – Advice and Ideas for UK Small Businesses and SMEs
On August 4 2021 an article published in the Financial Times reported that as much as £5bn worth of government-backed Covid loans could go unpaid, as business continue to face disruption following the lockdown.
The Coronavirus Business Interruption Loan Scheme (CBILS) provided a lifeline for UK businesses across different sectors of the economy. By the time it ended in March, £23.28bn had been provided through 98,344 facilities.
The government covered the initial 12 months of interest payments for CBILS, and this helped take the pressure off businesses – for the short term, at least.
But the time has come for many businesses to start their repayments.
Understandably, some business owners are concerned about having enough cash flow to meet the repayments and others are looking for ways to reduce costs.
If your business took out a CBILS facility or another type of loan to get through the impact of Covid, you might be able to reduce your repayment costs by refinancing to the Recovery Loan Scheme (RLS).
Refinancing debt to the Recovery Loan Scheme – how it works
Due to the 12-month interest/payment free period, your CBILS repayment profile is shortened. Essentially,