Tag Archive for Coronavirus Business Interruption Loan

Hot Business News Today

Can businesses save money on CBILS repayment costs by refinancing for a RLS loan?

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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,

Read more...

Hot Business News Today

Can businesses save money on CBILS repayment costs by refinancing for a RLS loan?

by  •  • 0 Comments

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,

Read more...

Hot Business News Today

Insurers pay out nearly 40% of expected £1.2bn SME Covid bill

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Originally written by Anna Jordan on Small Business
Insurers have paid out on less than half of estimated business interruption loan claims since the Supreme Court tipped in favour of SMEs.
The test case weighed up whether SMES that claimed on business interruption insurance for pandemic-related losses should be entitled to it.
>See also: Small firms win pay-outs in Covid business interruption insurance ruling
More than 10,000 UK policyholders have received some money since the Supreme Court ruling in January, with the total topping £470m. However, thousands are still waiting for an answer, even though the court ruled that decisions should be made quickly.
The Financial Conduct Authority (FCA) released the first batch of claims data this week, based on admissions from insurers. It set out how many claims relating to the case had been accepted and repaid.
The regulator’s preliminary assessment last June showed that the total claims from this test case could be £1.2bn. It made clear that this was not a firm estimate and was set out before the Supreme Court’s ruling.
For 8,177 of the claims, where final settlements have been agreed and paid, a total of £280m had been paid out, according to the FCA. For the 2,030 claims that hadn’t been

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Hot Business News Today

Insurers pay out nearly 40% of expected £1.2bn SME Covid bill

by  •  • 0 Comments

Originally written by Anna Jordan on Small Business
Insurers have paid out on less than half of estimated business interruption loan claims since the Supreme Court tipped in favour of SMEs.
The test case weighed up whether SMES that claimed on business interruption insurance for pandemic-related losses should be entitled to it.
>See also: Small firms win pay-outs in Covid business interruption insurance ruling
More than 10,000 UK policyholders have received some money since the Supreme Court ruling in January, with the total topping £470m. However, thousands are still waiting for an answer, even though the court ruled that decisions should be made quickly.
The Financial Conduct Authority (FCA) released the first batch of claims data this week, based on admissions from insurers. It set out how many claims relating to the case had been accepted and repaid.
The regulator’s preliminary assessment last June showed that the total claims from this test case could be £1.2bn. It made clear that this was not a firm estimate and was set out before the Supreme Court’s ruling.
For 8,177 of the claims, where final settlements have been agreed and paid, a total of £280m had been paid out, according to the FCA. For the 2,030 claims that hadn’t been

Read more...

Hot Business News Today

Covid debt drowning small businesses to the tune of £104bn

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Originally written by Timothy Adler on Small Business
Bank lending to small businesses hit over £100bn last year as SMEs scrambled for Government-backed Covid debt facilities.
Overdraft applications flatlined, despite gross bank lending to SMEs rising by 82 per cent to £104bn.
Around 1.5m Bounce Back Loan and Coronavirus Business Interruption Loan Scheme Covid debt facilities had been approved by the end of 2020.
And nearly one third of businesses accessed grant funding last year, compared to just 2 per cent in 2019.
The pandemic has hit the smallest firms hardest, with 49 per cent of sole trader and self-employed businesses reporting a fall in turnover compared to 38 per cent of businesses with 50-249 employees.
Worryingly, despite the flood of cheap Government lending, one third of small businesses surveyed in the latest British Business Bank report expect to shrink.
Only one in five (21 per cent) were expecting to grow, compared with 28 per cent the previous year.
SMEs in business services (25 per cent) and production (23 per cent) sectors were most optimistic about their prospects for growth over the next year, with businesses in construction and other services sectors least optimistic (both 17 per cent).
Encouragingly, small businesses have amassed a war chest due to the

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Hot Business News Today

State-backed CBILS replacement scheme delayed by lending details

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Originally written by Anna Jordan on Small Business
Progress on a state guarantee scheme to replace CBILS is being hampered by pricing and personal guarantee issues.
According to the Times, provisional details of the scheme were intended to be laid out by the end of last month, helping lenders prepare for a planned launch in April. However, said lenders are concerned that they won’t be prepared in time because of these complications.
It’s hoped that the new scheme can help businesses who aren’t eligible for normal commercial lending to get back on track post-pandemic.
The scheme would also help non-bank lenders to raise wholesale funds to continue to provide credit to small businesses. The state guarantee provides confidence over recoveries should a borrower default.
That said, the Treasury is torn between striking a balance between rules that will provide a broad range of lenders and conditions that will be attractive to borrowers, with bank and non-bank lenders having different needs in key areas.
CBILS loans over £250,000 were changed to state-backed rather than personal guarantees following an outcry last year. But despite the taxpayer guarantee, alternative funders are likely to need personal guarantees to meet the needs of their wholesale funders.
As for pricing, non-bank lenders are

Read more...

Hot Business News Today

State-backed CBILS replacement scheme delayed by lending details

by  •  • 0 Comments

Originally written by Anna Jordan on Small Business
Progress on a state guarantee scheme to replace CBILS is being hampered by pricing and personal guarantee issues.
According to the Times, provisional details of the scheme were intended to be laid out by the end of last month, helping lenders prepare for a planned launch in April. However, said lenders are concerned that they won’t be prepared in time because of these complications.
It’s hoped that the new scheme can help businesses who aren’t eligible for normal commercial lending to get back on track post-pandemic.
The scheme would also help non-bank lenders to raise wholesale funds to continue to provide credit to small businesses. The state guarantee provides confidence over recoveries should a borrower default.
That said, the Treasury is torn between striking a balance between rules that will provide a broad range of lenders and conditions that will be attractive to borrowers, with bank and non-bank lenders having different needs in key areas.
CBILS loans over £250,000 were changed to state-backed rather than personal guarantees following an outcry last year. But despite the taxpayer guarantee, alternative funders are likely to need personal guarantees to meet the needs of their wholesale funders.
As for pricing, non-bank lenders are

Read more...

Hot Business News Today

Microbusiness £50,000 Bounce Back Loans – how they work

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Originally written by Timothy Adler on Small Business
UPDATED: The chancellor is extending the repayment period on Bounce Back Loans for 1.4m small businesses.
Small firms will have ten years to repay instead of the previous six years, as announced by Sunak in September 2020. Interest on extended loans will be at a fixed rate of 2.5 per cent.
Businesses can also choose to make interest-only payments for six months (this option is available up to three times on the length of the loan) or pause repayments for up to six months (this option is only available once).
Lenders will start communicating these options to customers three months before repayments begin and advise them on how each option may affect their payment profile. They contact customers directly so there’s no need to get in touch with them.
The Bank of England’s regulation chief is warning that half of Bounce Back Loans will go sour.
What’s more, figures from the Office of National Statistics show that 14 per cent of businesses think they have little or no chance of surviving the next three months.
Last year, the government extended the application for Bounce Back Loans until the end of March 2021. Previously, the loan deadline was extended to January

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Hot Business News Today

The benefits of applying for a second CBILS loan

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Originally written by fundingoptions on Small Business
The Coronavirus Business Interruption Loan Scheme (CBILS) is proving to be a lifeline for businesses across the UK. Initially designed for those who’ve lost revenue or experienced cash flow disruption due to Covid-19, the scheme can also be used by businesses to grow and develop too. CBILS is part of a broad package of government support for UK businesses and employees.
CBILS loans of up to £5m are available on repayment terms ranging from three to six years. Businesses with a turnover of up to £45m can apply, and £4.97 billion of finance has been approved since the scheme began in March 2020.
If you’re one of the 82,000 plus companies who’ve already received a CBILS loan, did you know that you could be eligible for a second facility?
Who can apply for a second CBILS loan?
To be eligible for a second CBILS loan, you’ll have to meet the same criteria as you did for the first. For instance, you’ll need to show that your business would be viable were it not for Covid-19 and that it’s been negatively impacted by the pandemic.
Applying for a second CBILS loan can provide your business with the cash flow boost

Read more...

Hot Business News Today

The benefits of applying for a second CBILS loan

by  •  • 0 Comments

Originally written by fundingoptions on Small Business
The Coronavirus Business Interruption Loan Scheme (CBILS) is proving to be a lifeline for businesses across the UK. Initially designed for those who’ve lost revenue or experienced cash flow disruption due to Covid-19, the scheme can also be used by businesses to grow and develop too. CBILS is part of a broad package of government support for UK businesses and employees.
CBILS loans of up to £5m are available on repayment terms ranging from three to six years. Businesses with a turnover of up to £45m can apply, and £4.97 billion of finance has been approved since the scheme began in March 2020.
If you’re one of the 82,000 plus companies who’ve already received a CBILS loan, did you know that you could be eligible for a second facility?
Who can apply for a second CBILS loan?
To be eligible for a second CBILS loan, you’ll have to meet the same criteria as you did for the first. For instance, you’ll need to show that your business would be viable were it not for Covid-19 and that it’s been negatively impacted by the pandemic.
Applying for a second CBILS loan can provide your business with the cash flow boost

Read more...