Originally written by Timothy Adler on Small Business
Rishi Sunak has extended the UK’s £68bn coronavirus emergency financial support including the Bounce Back Loan Scheme until the end of March.
The Bounce Back Loan Scheme, the Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme had all been due to close at the end of January.
With swathes of southern England joining the north in Tier 3 lockdown, effectively shutting down pubs and restaurants, the Treasury needed to support small businesses which face months with much-reduced or no revenues.
The Treasury said: “We are extending the schemes now, ahead of Christmas and further into the new year, to ensure that businesses can continue to access the support they need to grow and recover.”
The loan schemes provide guarantees for banks to lend quickly and cheaply to struggling businesses during the pandemic. The Bounce Back Loan Scheme (BBLS) carries a full guarantee from the government for up to £50,000, while the others have a guarantee which covers the banks for about 80 per cent of the value of the loan.
However, the government itself has admitted that 60 per cent of Bounce Back Loans will never be repaid, leaving the taxpayer facing a
Tag Archive for Coronavirus Business Interruption Loan
Hot Business News Today
Bounce Back Loan Scheme extended until the end of March
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Rishi Sunak has extended the UK’s £68bn coronavirus emergency financial support including the Bounce Back Loan Scheme until the end of March.
The Bounce Back Loan Scheme, the Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme had all been due to close at the end of January.
With swathes of southern England joining the north in Tier 3 lockdown, effectively shutting down pubs and restaurants, the Treasury needed to support small businesses which face months with much-reduced or no revenues.
The Treasury said: “We are extending the schemes now, ahead of Christmas and further into the new year, to ensure that businesses can continue to access the support they need to grow and recover.”
The loan schemes provide guarantees for banks to lend quickly and cheaply to struggling businesses during the pandemic. The Bounce Back Loan Scheme (BBLS) carries a full guarantee from the government for up to £50,000, while the others have a guarantee which covers the banks for about 80 per cent of the value of the loan.
However, the government itself has admitted that 60 per cent of Bounce Back Loans will never be repaid, leaving the taxpayer facing a
Hot Business News Today
Government plans permanent state-backed small business loan scheme
by Timothy Adler • • 0 Comments
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
Hot Business News Today
Government plans permanent state-backed small business loan scheme
by Timothy Adler • • 0 Comments
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
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
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
Hot Business News Today
Small businesses should ‘only repay coronavirus debt once back in profit’
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Small businesses should only repay state-backed coronavirus debt once they are back in profit, a centre-right thinktank has argued.
The taxman could claw back emergency COVID-19 funding once businesses are back trading at a profit, argues Onward.
This would be through a surcharge on taxable profits and shareholder salaries, paying off your Bounce Back Loan or Coronavirus Business Interruption Loan.
>See also: Where to find your £1,000 small business lockdown grant
The issue is pressing because, according to the ONS, one in five small businesses are already “zombie” companies – meaning the annual cost of servicing their business debt equals their profits.
And nearly one in 20 firms (4.3 per cent) are technically insolvent with liabilities greater than their assets, due to the levels of debt they have already built up since March. These firms employ an estimated 1.8m workers.
Debt levels have leapt during this year’s lockdown as businesses tapped the government’s emergency loan schemes to meet costs, leaving many overburdened with debt. About £53bn has been loaned to small and medium-sized businesses finance industry lobby group The CityUK estimates that £35bn may not be repaid.
>See also: Lloyds rapped for forcing Bounce Back Loans borrowers to open accounts
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