COVID-19: Financial Support

COVID-19: Financial Support

The government has announced a range of financial support schemes for businesses. For information on the grants available please click here, for information on the business rates discounts available please click here.

Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme supports small and medium-sized businesses, with an annual turnover of up to £45m, to access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years.

You should apply via your lender’s website or through one of the accredited finance providers offering the scheme (and not the British Business Bank).

If you would like support in understanding the Coronavirus Business Interruption Loan Scheme please contact us.

The scheme is delivered through commercial lenders, backed by the Government-owned British Business Bank.

  • The scheme provides the lender with a government-backed guarantee against the outstanding balance of the facility.
  • There is no guarantee fee for SMEs to access the scheme. The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees
  • Under the scheme, lenders will not take personal guarantees of any form for facilities below £250,000.
  • For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:-they exclude the Principal Private Residence (PPR), and
    -recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied

The scheme has been significantly expanded along with changes to the scheme’s features and eligibility criteria. The changes mean even more smaller businesses across the UK impacted by the coronavirus crisis can access the funding they need.  Importantly, access to the scheme has been opened up to those smaller businesses who would have previously met the requirements for a commercial facility but would not have been eligible for CBILS.

The full rules of the scheme and the list of accredited lenders is available on the British Business Bank website.

Coronavirus Large Business Interruption Loan Scheme

The Coronavirus Large Business Interruption Loan Scheme (CLBILS)  opened on Monday 20 April 2020 to facilitate access to finance for medium-sized and larger businesses affected by the coronavirus outbreak.

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) provides financial support to mid-sized and larger UK businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

Specifically, it facilitates access to finance for businesses with a turnover above £45 million, the upper limit for the existing smaller-business focused Coronavirus Business Interruption Loan Scheme (CBILS).

CLBILS is available through a range of British Business Bank accredited lenders and partners, the maximum amount available through CLBILS to a borrower and its group has now increased from £50m to £200m. Term loans and revolving credit facilities over £50m will be offered by CLBILS lenders which have secured additional accreditation. The maximum size for invoice finance and asset finance facilities remains at £50m. Companies borrowing more than £50m through CLBILS will be subject to further restrictions on dividend payments, senior pay and share buy-backs during the period of the loan.

For information on how to apply click here

If you would like support in understanding the Coronavirus Large Business Interruption Loan Scheme please contact us.

A lender can provide:

  • up to £25 million to businesses with turnover from £45 million up to £250 million
  • up to £50 million to businesses for those with a turnover of over £250 million

Finance is available in the form of:

  • term loans
  • revolving credit facilities (including overdrafts)
  • invoice finance
  • asset finance

Covid-19 Corporate Financing Facility

The new Covid-19 Corporate Financing Facility (CCFF) means that the Bank of England will buy short-term debt from larger companies. This will support companies which are fundamentally strong, but have been affected by a short-term funding squeeze. It will also support corporate finance markets overall and ease the supply of credit to all firms. The scheme will be funded by central bank reserves – in line with other Bank of England market operations. It will operate for at least 12 months, and for as long as steps are needed to relieve cash flow pressures on firms that make a material contribution to the UK economy.

Companies – and their finance subsidiaries – that make a material contribution to the UK economy are able to participate in the facility. More information on eligibility can be found on the Bank of England website.

In order to access the CCFF, you will need to contact your bank. It is important to note that not all banks issue commercial paper. If your bank does not issue commercial paper, UK Finance will provide a list of banks that are able to assist. More information can be found on the Bank of England website.

If you would like support in understanding the Corporate Financing Facility  please contact us.

Future Fund

How it works:

  • Open for applications from Wednesday 20th May.
  • Scheme operates on a commercial basis to deliver an initial commitment of £250m of new government funding.
  • Financing will be unlocked by additional third-party investment on a match funded basis.
  • Applications submitted via an online platform based on a set of standard terms and eligibility criteria.

The Future Fund will provide government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors.

A factsheet on the Future Fund can be found here.

If you would like support in understanding the Future Fund and Innovate UK funding  please contact us.

Bounce Back Loans

Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders, the Chancellor announced on Monday 27 April. Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days. The loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form.

The government, which has been consulting extensively with business representatives about the design of the new scheme, will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months. The loans will be easy to apply for through a short, standardised online application. The loan should reach businesses within days- providing immediate support to those that need it as easily as possible.

The scheme opened for applications on Monday 4 May. Firms will be able to access these loans through a network of accredited lenders.

Businesses should check the British Business Bank website to find out which lenders provide Bounce Back Loans. Businesses will be required to fill in a short online application form on their lender’s website, which self-certifies whether they are eligible for a Bounce Back Loan facility.

If you would like support in understanding the Bounce Back funding  please contact us.

Support for Businesses Paying Tax

Because of coronavirus you may be able to delay (defer) some tax payments without paying a penalty. You can:

Contact the HMRC coronavirus (COVID-19) helpline if you cannot pay any other tax bills because of coronavirus.

For more information on late payments, check with HMRC

Other initiatives

Other initiatives announced by government to support businesses financially are:

  • Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction. These measures will mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June. There is the option for the government to extend this period if needed. This is not a rental holiday. All commercial tenants will still be liable for the rent. Commercial tenants are protected from eviction if they are unable to pay rent.
  • If your accounts will be late because your company is affected by COVID-19, and your filing deadline has not yet passed, you can apply here for an automatic and immediate 3 month extension to file your accounts.
  • High street shops and other companies under strain will be protected from aggressive rent collection and asked to pay what they can during the coronavirus pandemic. The majority of landlords and tenants are working well together to reach agreements on debt obligations, but some landlords have been putting tenants under undue pressure by using aggressive debt recovery tactics.To stop these unfair practices, the government will temporarily ban the use of statutory demands and winding up orders where a company cannot pay their bills due to coronavirus, to ensure they do not fall into deeper financial strain. Government is also laying secondary legislation to provide tenants with more breathing space to pay rent by preventing landlords using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days of unpaid rent.