The Government has announced a raft of business assistance to help companies large and small.
The Coronavirus Business Interruption Loan Scheme (CBILS) is available to UK-based SME businesses with an annual turnover of £45 million or below, are able to apply through the British Business Bank, which will lend eligible businesses between £1,000 and £5 million.
The Government will absorb interest costs in these loans for the first 12 months. It is important to remember that the borrower is ultimately liable for the debt.
Lenders may require a personal guarantee where more than £250,000 is borrowed, however, this cannot be a main residence and where the business defaults, the bank can only seek to recover 20 per cent of the outstanding balance after the sale of business assets.
You should seek professional advice, particularly if you are asked to provide security for a CBILS loan.
We are here to assist with loan applications so please contact us now for help and practical support.
The initial package of business support measures announced by the Chancellor in response to the coronavirus outbreak appeared to ignore the plight of sole traders and the smallest businesses.
However, the recently introduced business bounce back loans should go some way to help. The scheme helps small businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.
The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year.
In addition to the various Government loan initiatives, there may be other funding options which are available to your business. Get in touch with our business advisors now to explore all available options.