The scheme is designed to support UK based small and medium-sized businesses, with a turnover of up to £45 million, with a viable business proposition but are struggling with the challenges of the coronavirus situation.
Further information can also be found on the British Business Bank and Bank of England websites.
You can currently apply for a loan of between £50,001 and £5 million from your bank subject to eligibility. Loans up to £50,000 are covered by the bounce back loan scheme. See our blog for more details.
Key points of the loan
- Extended to November 30th 2020.
- Spread repayments of your loan from 1 to 6 years.
- Interest free period. In order to support client cash flow issues, the arrangement fees and the first 12 months interest will be paid by the UK government as a “Business Interruption Payment”.
- There are flexible repayment structures and the option to take capital repayment holidays, so that payments can be matched to income (subject to prior approval)
- The scheme is not available to businesses borrowing £50,001 or more if the business was an ‘undertaking in difficulty’ as of 31 December 2019. ’Undertaking in difficulty’ is defined in Article 2 (18) of the Commission Regulation (EU) no. 651/2014 of 17 June 2014. When you apply, you will be asked to confirm that your business was not an ‘undertaking in difficulty’ as of 31 December 2019.
- Government-backed 80% guarantee
- You are responsible for repaying 100% of the loan. Where default occurs, the bank will follow its standard commercial recovery procedures, including the realisation of security before the bank makes a claim against the government’s guarantee for any shortfall.
- Loans are available to most business sectors, but restrictions apply
- The CBILS is available to businesses affected by coronavirus (COVID-19) who;
- Are UK-based and operate in the UK.
- Security may be required but primary residential property cannot be taken as security
- Personal guarantees as security are not required.
- Have a borrowing proposal that, if not for coronavirus, would be considered viable.
- Require a loan to enable trading during short-to-medium term difficulty.
- Have a group turnover of up to £45 million.
- Can afford to repay the loan for a term up to six years.
If you require further information please contact us. As Accountants, Tax Compute will always advise what is best for the client. Give us a call and we can offer you a free consultation and advice on what is best.
Contact for more information
Jon GUNNING
Cheltenham Office
Tel 01242 241998