The chancellor has announced a £330bn package of government-backed, and guaranteed loans to support businesses affected by the Covid-19 outbreak.
You can find more information about the Coronavirus Business Interruption Loan scheme on the British Business bank website.
The Coronavirus Business Interruption Loan Scheme is set to go live at noon 23rd March 2020. Under the Scheme, you can borrow up to £5m as a loan or other facilities (depending on the lender) with the first 12 month interest-free. Over 40 accredited providers will be offering facilities under the Scheme. There's a good chance that your current bank does too.
Banks are likely to be overwhelmed with applications, so it's best to prepare in advance all the documentation needed to apply.
Who can benefit from this scheme?
Any business who needs access to cash to pay rent, salaries, suppliers, or buy stock, will be able to access a government-backed loan, subject to certain criteria.
There will be two main schemes available. Plus, extra support for certain business sectors that have been most severely affected.
Further details of the schemes, including eligibilty criteria and how to access the benefits, will be announced by the government shortly. We’ll update this information as it becomes available.
Here's a handy to-do list in case you are looking to apply:
- Check if your bank offers facilities under the Coronavirus Business Interruption Loan Scheme;
- If it does, get in touch with your main contact at your current bank as they will likely prioritise existing clients;
- Find your full annual accounts for the last three years if you have them;
- Prepare management accounts for the current financial year
- Retrieve bank statements for the past 6 months;
- Make a list of Aged Debtor & Creditors;
In addition to the above, your bank might also ask for the following:
- Current monthly fixed costs (wages, rent, pensions etc), future monthly fixed costs if these are being reduced and measures taken to reduce costs;
- Number of employees including directors, both currently and in the short-medium term;
- Statement Summary on how COVID-19 is affecting the businesses (sector specific would help);
- Asset, Liability, Income, Expenditure (ALIE) – This is needed should the lender need to take any personal guarantees ;
- Current business insurance schedule – Secondary mitigation should the Business Interruption section of the policy be activated and cover loss or earnings due to COVID-19;
In order to make the application process the quickest possible, you should check what kind of facilities your bank offers and how much will you need to borrow through it.
If you need help with short-term funding for businesses affected by COVID-19, we work with partners so we're happy to connect you, we will update you with full details soon.