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 and business rates discounts available please click here.
For information on the job support schemes please click here.
The Recovery Loan Scheme is now open for applications to help businesses of any size access loans and other kinds of finance so they can recover after the pandemic and transition period.
You can use the finance for any legitimate business purpose – including managing cashflow, investment and growth. However, you must be able to afford to take out additional debt finance for these purposes. The scheme gives the lender a government-backed guarantee against the outstanding balance of the facility.
The scheme offers:
- term loans or overdrafts of between £25,001 and £10 million per business
- invoice or asset finance of between £1,000 and £10 million per business
No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.
The maximum length of the facility depends on the type of finance you apply for and will be:
- up to 3 years for overdrafts and invoice finance facilities
- up to 6 years for loans and asset finance facilities
The government guarantees 80% of the finance to the lender. As the borrower, you are always 100% liable for the debt.
The scheme is open until 31 December 2021, subject to review.
Find an accredited lender here
Repayment of Bounce Back Loans
Bounce Back Loan borrowers will now have the option to tailor payments according to their individual circumstances. Lenders will proactively and directly inform their customers of Pay as You Grow, and borrowers should only expect correspondence three months before their first repayments are due.
It will provide businesses with the following options:
- Extend the length of the loan from six years to ten
- Make interest-only payments for six months, with the option to use this up to three times throughout the loan
- Pause repayments entirely for up to six months
If you would like support in understanding the Bounce Back funding please contact us.
Extended loss carry back for businesses
To help otherwise-viable UK businesses which have been pushed into a loss-making position, the trading loss carry-back rule will be temporarily extended from the existing one year to three years.
If you deferred VAT payments due between 20 March and 30 June 2020, Instead of paying the full deferred VAT outstanding by 31 March 2021, businesses can spread what they owe over up to 11 smaller monthly payments from this month. Businesses can join the service online without needing to contact HMRC. The service opened on 23 February 2021 and will close on 21 June 2021.
Other initiatives announced by government to support businesses financially are:
- The government will extend the temporary reduced rate of 5% VAT for goods and services supplied by the tourism and hospitality sector until 30 September 2021. To help businesses manage the transition back to the standard 20% rate, a 12.5% rate will apply for the subsequent six months until 31 March 2022.