Originally written by Timothy Adler on Small Business
The government is planning to replace existing coronavirus business support with a permanent state-backed small business loan scheme.
Under the plan, which would be launched in January, the government would guarantee 80 per cent of loans to small businesses, ranging from a few thousand pounds up to £10m per company over a six-year lending period.
In effect, the new state-backed SME loan scheme would extend the Coronavirus Business Interruption Loan Scheme (CBILS) but with a lower threshold. The minimum CBILS loan is £10,000.
>See also: Treasury eyes hitting self-employed gig workers with VAT charge
According to the Financial Times, the banks would set their own interest rate for their loans, but the rate is likely to be capped at about 15 per cent – just like the CBILS – which is far higher than the 2.5 per cent fixed interest rate of the parallel Bounce Back Loans Scheme (BBLS).
Research by our sister title GrowthBusiness found that lenders are charging anything between 3 per cent and 15 per cent for CBILS loans.
As of last month, the CBILS and the BBLS have lent £60.64bn to struggling businesses between them.
And the new state-backed SME lending scheme would have more stringent
Tag Archive for Bounce Back Loans
Hot Business News Today
A guide to getting a business loan during Covid-19
by fundingoptions • • 0 Comments
Originally written by fundingoptions on Small Business
The government’s CBILS and BBLS initiatives are helping SMEs across the UK to access a Covid-19 business loan. On November 2, the Government announced that the Coronavirus Business Interruption Loan Scheme (CBILS) will be extended until January 31 2021.
How do I apply for a government-backed loan?
Applications for the government backed loans schemes – including BBLS and CBILS — will be open until January 31 2021. Companies will have the option to repay their loans over 10 years via a “pay as you grow” initiative. If a business finds itself in “real trouble”, six-month interest-only payments and payment holidays are available.
Currently, there are over 100 accredited lenders providing finance to businesses through the CBILS scheme. Funding Options is partnered with 40 plus of them and you can use our platform to apply for a CBILS loan. The benefit of applying through an accredited partner like Funding Options is that a finance Specialist will help guide you through the process.
What do I need to apply?
Firstly, you must be a UK-based business to apply for government-backed support. For a BBLS loan the lender will ask you to submit a short online application form and self-declare that you’re
Hot Business News Today
How to choose a debt collection agency
by chrisleslie • • 0 Comments
Originally written by chrisleslie on Small Business
Recent reports in the press advising that banks may be looking to bring in third-party debt collection to collect Bounce Back Loans (BBLs) that go “bad” raises a number of important issues.
Debt collection agencies have always supported banks in collecting non-performing loans, credit card debts, mortgages etc. so to that extent the story is nothing “new”. What is new, perhaps, is the tone in which the story is being reported, and that seeking professional help is a sensible step for banks and Government to protect what is, in many ways, the public purse.
Certainly, whether directly or indirectly, the availability of credit impacts us all, and we should applaud those who take steps to strike the correct balance. Banks fear they may be “overwhelmed” with the task and are, understandably, concerned about protecting their reputations. They are also concerned about the increased blurring of the lines between personal and business debt, and the accelerated focus on vulnerability. Which is precisely why expert help is required.
>See also: Nearly two thirds of Bounce Back Loans could go bad, says government
How to choose a debt collection agency
Bringing this debate into the open raises another important issue, not least
Hot Business News Today
How to choose a debt collection agency
by chrisleslie • • 0 Comments
Originally written by chrisleslie on Small Business
Recent reports in the press advising that banks may be looking to bring in third-party debt collection to collect Bounce Back Loans (BBLs) that go “bad” raises a number of important issues.
Debt collection agencies have always supported banks in collecting non-performing loans, credit card debts, mortgages etc. so to that extent the story is nothing “new”. What is new, perhaps, is the tone in which the story is being reported, and that seeking professional help is a sensible step for banks and Government to protect what is, in many ways, the public purse.
Certainly, whether directly or indirectly, the availability of credit impacts us all, and we should applaud those who take steps to strike the correct balance. Banks fear they may be “overwhelmed” with the task and are, understandably, concerned about protecting their reputations. They are also concerned about the increased blurring of the lines between personal and business debt, and the accelerated focus on vulnerability. Which is precisely why expert help is required.
>See also: Nearly two thirds of Bounce Back Loans could go bad, says government
How to choose a debt collection agency
Bringing this debate into the open raises another important issue, not least
Hot Business News Today
HSBC will not accept any more Bounce Back Loan applications
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
HSBC has closed its doors on new Bounce Back Loan applications, saying it needs to process loan decisions already in hand.
Small businesses should have until the end of November to apply for a Bounce Back Loan.
To date, 1.3m companies have borrowed £38bn through the Bounce Back Loan Scheme (BBLS).
>See also: Half of small businesses will never repay Bounce Back Loans, warn banks
HSBC halting Bounce Back Loan applications due to huge demand will anger small business customers hoping to sneak under the wire and take out the one-year interest-free loan before November 30.
The bank has approved 194,000 Bounce Back Loans so far worth £5.9bn and said it is approving a new loan every 20 seconds.
It will continue to process applications from existing HSBC customers as well as those made by non-customers before 9am on Wednesday, September 30.
HSBC will be closed to businesses opening new accounts until December 14.
>See also: Lloyds rapped for forcing Bounce Back Loans borrowers to open accounts
An HSBC UK spokesman told the Telegraph: “As one of the only banks that remained open to applications from all UK businesses since the scheme’s launch, we received a huge level of demand. With the
Hot Business News Today
Nearly two thirds of Bounce Back Loans could go bad, says government
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Nearly two thirds of Bounce Back Loans, designed to help small businesses survive Covid-19, may never be repaid, says the government.
The business department in its latest set of accounts says that up to 60 per cent of Bounce Back Loans, hurriedly introduced in July, could go bad.
If so, that could mean the taxpayer having to find over £20bn to cover small business loans which have defaulted.
>See also: Small businesses have average of just £9,000 left from Bounce Back Loan
The Bounce Back Loan Scheme (BBLS) provides private sector lenders with a 100-per-cent state guarantee on low-interest loans to small companies. It has underwritten £38bn of credit to 1.3 million companies to date.
Overall, the taxpayer faces losses of as much as £23bn so far in bad loans across all the state coronavirus emergency bailout schemes.
Vulnerable to abuse
Yesterday, it emerged that ex-British Business Bank (BBB) CEO Keith Morgan wrote to business secretary Alok Sharma in May, warning that the schemes risked wasting taxpayers money.
Mr Morgan said: “The scheme is vulnerable to abuse by individuals and by participants in organised crime.”
A draft review by PwC had classified the risk of fraud as “very high”, he added.
The BBB, which
Hot Business News Today
Rishi Sunak to extend government coronavirus business support
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Chancellor Rishi Sunak is set to extend all four of the UK’s emergency coronavirus business support schemes until the end of November.
Until now, the Treasury has resisted calls from business groups to extend the Coronavirus Business Interruption Loan Scheme (CBILS), in particular. The CBILS is due to expire at the end of October with the Bounce Back Loans scheme following shortly thereafter in November.
However, given this week’s expected further semi national lockdown, according to the Financial Times, the chancellor has bowed to the inevitable in extending all coronavirus business support schemes, which have already backed £53bn in lending to business through government guarantees.
Second national lockdown
The news comes as a thinktank warns that a second national lockdown would cost the economy £250m a day as people are kept out of pubs and restaurants and encouraged to work from home.
The Centre for Economics and Business Research (CEBR) warned that GDP could fall by between 3 per cent and 5 per cent in the last three months of this year compared with the third quarter.
Although the £250m figure is a tenth of the impact of the full-blown lockdown at its peak in April, CEBR deputy chairman
Hot Business News Today
Small businesses have average of just £9,000 left from Bounce Back Loan
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Businesses have an average of just over £9,000 left from any Bounce Back Loan they took out to save their struggling firms.
Over a million small businesses have taken out the state-backed emergency loans and the majority expect what’s left of the cash to run out by the end of September.
And nearly two thirds of SMEs (63 per cent) surveyed that have taken out Bounce Back Loans were unaware that the deadline for applying for the larger Coronavirus Business Interruption Loan Scheme (CBILS) is also the end of this month.
>See also: Where to find your £1,000 small business lockdown grant
Of the 1.2m small businesses that have taken out Bounce Back Loans, 39 per cent used the cash to pay suppliers and 29 per cent used the £50,000 maximum loan available to set up e-commerce stores and online shopping channels.
According to a MarketFinance survey, most SMEs (76 per cent) would be keen on having a CBILS facility “on ice” in case they need it later in the year in anticipation of larger bills, taxes due towards the end of the year.
>See also: Boris must ‘act now’ to save businesses from going under
Over three quarters of small
Hot Business News Today
Rishi Sunak to extend government coronavirus business support
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Chancellor Rishi Sunak is set to extend all four of the UK’s emergency coronavirus business support schemes until the end of November.
Until now, the Treasury has resisted calls from business groups to extend the Coronavirus Business Interruption Loan Scheme (CBILS), in particular. The CBILS is due to expire at the end of October with the Bounce Back Loans scheme following shortly thereafter in November.
However, given this week’s expected further semi national lockdown, according to the Financial Times, the chancellor has bowed to the inevitable in extending all coronavirus business support schemes, which have already backed £53bn in lending to business through government guarantees.
Second national lockdown
The news comes as a thinktank warns that a second national lockdown would cost the economy £250m a day as people are kept out of pubs and restaurants and encouraged to work from home.
The Centre for Economics and Business Research (CEBR) warned that GDP could fall by between 3 per cent and 5 per cent in the last three months of this year compared with the third quarter.
Although the £250m figure is a tenth of the impact of the full-blown lockdown at its peak in April, CEBR deputy chairman
Hot Business News Today
Small businesses have average of just £9,000 left from Bounce Back Loan
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Businesses have an average of just over £9,000 left from any Bounce Back Loan they took out to save their struggling firms.
Over a million small businesses have taken out the state-backed emergency loans and the majority expect what’s left of the cash to run out by the end of September.
And nearly two thirds of SMEs (63 per cent) surveyed that have taken out Bounce Back Loans were unaware that the deadline for applying for the larger Coronavirus Business Interruption Loan Scheme (CBILS) is also the end of this month.
>See also: Where to find your £1,000 small business lockdown grant
Of the 1.2m small businesses that have taken out Bounce Back Loans, 39 per cent used the cash to pay suppliers and 29 per cent used the £50,000 maximum loan available to set up e-commerce stores and online shopping channels.
According to a MarketFinance survey, most SMEs (76 per cent) would be keen on having a CBILS facility “on ice” in case they need it later in the year in anticipation of larger bills, taxes due towards the end of the year.
>See also: Boris must ‘act now’ to save businesses from going under
Over three quarters of small