There are 3 major updates this week concerning the support available for businesses during the Coronavirus outbreak.
Please find details below with relevant links.
The Bounce Back Loan Scheme (BBLS)
Open from 4th May 2020
This has been has been set up to support small businesses who are struggling to get funding through the main Coronavirus Business Interruption Loan Scheme (CBILS).
To qualify -The scheme is open to businesses, including sole traders and partnerships, that were trading on 1 March 2020.
To apply – Complete a two-page application form and self-certify your details. This means lenders do not have to verify the information. Most applicants should receive loans within a few days after being approved.
You can’t apply if you’ve already got a CBILS loan but you can transfer a CBILS loan of up to £50,000 to BBLS before 4 November 2020.
Following the launch of BBLS, the minimum loan for CBILS has been increased to £50,001.
Bounce Back Loan Scheme features
Up to £50,000 loan: Available loans are from £2,000 up to 25% of a business’ annual turnover or £50,000, whichever is lower. Turnover is based on a full calendar year so if your business was established after 1 January 2019, you should apply the 25% limit to your estimated annual turnover from the date you started.
- 100% guarantee: Lenders have a 100% government guarantee. The borrower always remains 100% liable for the debt.
- Interest free for 12 months: The government will cover the first 12 months of interest.
- Interest rate:The interest rate after the 12 months interest free period is set at 2.5% per year.
- No repayments for 12 months: Borrowers will not have to begin principal repayments for the first 12 months.
- No guarantee fee: Businesses and lenders do not have to pay a fee to access the scheme.
- Finance terms: The length of the loan is for six years but early repayment is permitted without early repayment fees.
- No personal guarantees: No personal guarantees are required and no recovery action can be taken over a principal private residence or principal private vehicle.
Bounce Back Loan Scheme eligibility criteria
- Businesses from all sectors can apply. The exceptions are Credit institutions (falling within the remit of the Bank Recovery and Resolution Directive), public sector bodies, insurance companies and state-funded primary or secondary schools – all of these sectors are not eligible to apply.
The business must self-certify the following:
- Confirm it is UK-based in its business activity and established by 1 March 2020
- Confirm it has been adversely impacted by coronavirus
- Confirm it is not currently using a government-backed coronavirus loan scheme (unless using BBLS to refinance a whole facility)
- Confirm it was not a ‘business in difficulty’ at 31 December 2019 (if it was, then the borrower must confirm it complies with additional state aid restrictions under de minimis state aid rules)
- Confirm it is not in bankruptcy, liquidation or undergoing debt restructuring
- Confirm that 50% of the income of the business is derived from its trading activity (this confirmation is not required if the borrower is a charity or a further education college)
How to apply for a Bounce Back Loan
Accredited lenders are listed on the British Business Bank website.
If you experience problems accessing the British Business Bank website the current list of accredited lenders is as follows:
- Clydesdale Yorkshire Bank
- Danske Bank
- Ulster Bank
- Lloyds Bank
- Bank of Scotland
Most lenders are currently only accepting applications from existing customers, but it has been reported that HSBC is taking applications from non-customers if you set up a ‘feeder account’.
Lenders do not need to carry out any credit checks or verify the long term viability of firms.
Top-up to local business grant funds scheme
New funding is being made available to co-working space tenants, market traders and other businesses in England who aren’t being given funding through the coronavirus business rates relief grant scheme.
The fund is aimed at small businesses with ongoing fixed property-related costs. Local authorities have been asked to prioritise businesses in shared spaces, regular market traders and small charity properties that would meet the criteria for Small Business Rates Relief. It also covers bed and breakfasts that pay council tax rather than business rates.
Local authorities may choose to make payments to other businesses “based on local economic need”.
– Businesses must have under 50 employees and be able to demonstrate that they have seen a significant drop of income due to coronavirus restriction measures.
Grants of £10,000 and £25,000 will be available and local authorities can choose to make payments of any other amount under £10,000.
More guidance and amounts being provided to each council will be released shortly.
For more details visit this link
Self Employed Income Support Scheme – portal opens today!
Self-employed are now invited to get ready to make their claims for coronavirus (COVID-19) support. For more details on the scheme visit our blog by clicking here.
From today (Monday 4 May), HM Revenue and Customs (HMRC) those who are eligible for the Self Employed Income Support Scheme (SEISS) will be able to claim a taxable grant worth 80% of their average trading profits up to a maximum of £7,500 (equivalent to three months’ profits), paid in a single installment.
HMRC has opened the portal so you can go online and check your eligibility for SEISS.
In order to receive quick confirmation from the eligibility checker, make sure you have –
Your Unique Taxpayer Reference (UTR) and National Insurance Number to hand and make sure your details are up-to-date in their Government Gateway account.
Once the online check is complete, eligible customers will be given a date when they can submit their claim.
For more details here and the link to the portal click here.
For other help available during the Coronavirus outbreak check out our blog – click here.
If you are business in need of help and support and would like to talk to us about our accounting services please call or email us.