Inca COVID-19 Update: Further Changes to Help Smaller Businesses
23rd April 2020
Welcome to our latest COVID-19 update.
We hope you and your family are keeping safe and healthy. We understand that this challenging period is testing all of us – professionally and personally.
Business Interruption Loan Scheme: Further changes to Help Smaller Businesses
The government is still making ongoing refinements to the Coronavirus Business Interruption Loan Scheme (CBILS). Two further changes announced will help make the scheme more accessible to smaller businesses adversely affected by the pandemic:
- The minimum loan requirement – previously set at 25K has now been dropped
- The stipulation that a business cannot borrow more than twice its annual wage bill or more than 25% of its total turnover in 2019 has also been removed
Points to note
Any lending bank you approach will still be required to verify the viability of your business. In other words, they will need to check your business would have been granted the loan in the absence of the pandemic.
You won’t have to pay a guarantee fee to access the scheme, and the first 12 months of interest payments together with any fees levied by the lending bank will be covered by a Business Interruption Payment made by the government. It means that you will benefit from no upfront costs and lower initial repayments.
Is your business eligible?
To be eligible for a loan under CBILS, your business must:
- Be UK-based in its business activity
- Have an annual turnover of no more than £45 million
- Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic
- Self-certify that it has been adversely impacted by the coronavirus.
The scheme is now available to businesses that would not previously have been eligible because they met the requirements for a standard commercial loan. Therefore, if you’ve tried to access funding before without success, you might want to consider re-contacting your lender.
Remember also that it’s worth approaching more than one bank. Although all lenders are operating within the guidelines of the British Business Bank, you may find some slight variations in how the scheme is delivered.
You can find more information at: https://www.british-businessbank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/current-accredited-lenders-and-partners/You can use the ‘Filter by Financial Requirements’ button on the right-hand side of the web page to find lenders offering loans under £25K.
Finally, do remember that we’re here to help you – even if it’s just for a chat to give you a 10 minute respite from the kids (or your partner!). Accountants have been practicing social distancing for years!
We hope you find this information useful. Please feel free to share it with other business owners in your contact sphere.
We aim to issue regular email updates throughout the Coronavirus crisis. If you do not already receive our emails please do feel free to sign up to our free advice service by following the ‘Subscribe’ link on the right hand side of this page.
If you have specific questions you’d like to ask, please email our new, dedicated email address [email protected] . We will collate questions and share answers here on the newsletter platform and on our social media channels.