On 2 November, the Government announced that the Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) would be extended until 31 January 2021. Both schemes are part of a wider package of government support for UK businesses and employees. In the latest article from Team 4 Solutions, which offers no fuss bookkeeping services from its bases in East and West Sussex, we look at both schemes in more detail. Both are aimed at providing financial support to smaller and medium sized businesses (SMEs) across the UK that are losing revenue and seeing their cash flow disrupted, as a result of the COVID-19 outbreak.

Coronavirus Business Interruption Loan Scheme (CBILS)

The Coronavirus Business Interruption Loan Scheme (CBILS) helps SMEs to access loans and other kinds of finance up to £5m. The government guarantees 80% of the finance to the lender and pays any interest and fees for the first 12 months. 

You are eligible to apply for the loan if your business:

  • Is UK based 
  • Has an annual turnover of no more than £45 million
  • Can demonstrate your business is viable, were it not for the pandemic
  • Has been adversely impacted by the coronavirus (COVID-19)
  • Is not classed as a business in difficulty if applying to borrow £30,000 or more

The loan is for 3 years for overdrafts and invoice finance facilities and up to 6 years for loans and asset finance facilities. 50 lenders are participating in the scheme with details accessed via the lender’s website. You will need to declare how much you would like to borrow, what the money will be used for, and the length of time needed to pay it back. Documentation will be required which could include cash flow forecast, business plan, historic and management accounts and details of assets. For more information, click here.

The Bounce Back Loan Scheme (BBLS)

The Bounce Back Loan Scheme (BBLS) was established to enable small and medium sized businesses to access finance more quickly during the COVID-19 outbreak. It applies to businesses that are seeing their cash flow interrupted or are losing revenue. Under the terms of the scheme, businesses can borrow between £2,000 and up to 25% of their turnover with the maximum loan available being £50,000. With this loan the government is guaranteeing 100% of the loan with no fees or interest payable for the first 12 month, after which it will be 2.5% p.a.

Applications extended until 31 January 2021

The scheme is now open to applications until 31 January 2021. It is also worth noting that if you have previously borrowed on this scheme but borrowed less than you were actually entitled to, you can top up your existing loan to the maximum amount from 10 November 2020. However, make sure you ask for the top up before 31 January 2021. 

You are eligible to apply for the loan if your business:

  • Is UK based
  • Was established before 1 March 2020
  • Has been adversely affected by coronavirus
  • You are already claiming funding

You cannot apply for the loan if you are already claiming under Coronavirus Business Interruption Loan Scheme (CBILS) or Coronavirus Large Business Interruption Loan Scheme (CBILS) or COVID-19 Corporate Financing facility.

Length of the BBLS

The loan is for 6 years although it can be repaid earlier without paying a fee although as stated no repayment will be due during the first 12 months. Once this has elapsed, your lender will advise you of further options that are available including extending the loan to 10 years, moving to interest-only payments for a period of 6 months and pausing payments for 6 months if 6 payments have already been made. 

How to apply for a BBLS loan

28 lenders are participating in the scheme including the main banks and details can be found on their websites. Application is straightforward with a short online form and a declaration that you are eligible. For more information about this scheme, click here

What can Team 4 Solutions do to help your business?

If you would like to find out if your business is eligible for a CBILS or BBLS loan, why not get in touch with the experts at Team 4 Solutions? We can also help you with your cash flow forecast and your management accounts, which you may need for a CBILS loan. Please call us on +44 1825 763378 for more information or email info@team4bookkeeping.co.uk From time to time, we invite local businesses to join our weekly Zoom meetings which give you all the up to date news. If you would like to join us, please get in touch.