CBILS and Bounce Back Loans
We are hearing lots of anecdotal evidence that many small firms are struggling to plough through the bureaucracy of Coronavirus Business Iinteruption Loan Scheme (“CBILS”) applications and that the banks are not perhaps being as supportive as was intended. Certainly the reported data on the quantum of loans being advanced supports the view that the scheme is not fulfilling its original objective at this time.
It comes as a pleasant relief therefore that the Chancellor has announced that as from Monday 4th May small businesses will gain access to a new fast-track finance option. This is being referred to as the Coronavirus Bounce Back Loan. The scheme has been designed to ensure that small businesses who need vital cash injections to keep operating can get finance of up to £50,000 in a matter of days.
The key details are as follows;
Loans are expected to be turned around within 24 hours;
The loans are 100% guaranteed by the Government;
There will be no forward eligibility checks;
All that is required is to complete a simple 2 page self-certification form online;
£2,000 - £50,000 available up to a maximum of 25% of a firm’s annual turnover;
No fees or interest will be applied during the first 12 months;
No repayments will be due during the first 12 months;
The government will work with lenders to agree a low rate of interest for the remaining period of the loan.
Although this scheme is not available to those businesses already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS), it will provide much needed funds to small businesses who have been adversely affected by the crisis. According to the guidance a CBILS loan application (if less than £50k) can be transferred to this new scheme in order to provide faster cash delivery.
Specific details of the online application form have not yet been released and we will inform you further as and when this happens. Should you have any questions or require any assistance at that point, please do get in touch with your normal contact at Continuum who will be delighted to help you.