We now have more details about the support measures that have been announced for businesses and the self-employed affected by the coronavirus situation.
Further information about the Coronavirus Business Interruption Loan Scheme has now emerged which is outlined below.
Who the scheme is for
This scheme is designed to support UK-based, small and medium-sized businesses, who are losing revenue and seeing their cashflow disrupted as a result of the impact of the Covid-19 outbreak.
- A government-backed loan scheme
- Loans available from £25,000 up to £5 million *
- Flexible terms from 1-6 years
- 12-month capital repayment holidays available, subject to eligibility
- Interest-free for 12 months
- No arrangement fees
- Interest circa 1.5% per annum
What you need to know
In most cases, the usual financing checks still apply. You will still have to provide the full range of financial information that would be required when applying for finance under normal circumstances.
It is expected that Banks will take 4 – 6 weeks to approve loans under the scheme.
You may be asked for Personal Guarantees and the Banks may offer you an alternative product, e.g a commercial loan, instead.
Smaller or specialist lenders will have their own processes and some are allowing digital applications. We hope to have more information on this shortly.
See the full list of accredited CBILS lenders here. This is also subject to change.
Self-employment Income Support Scheme
The Government has announced its plans for supporting the self-employed through this period.
Who is it designed for
The scheme is designed to support self-employed people who have lost income as a result of the coronavius outbreak and will pay 80% of your average profits over the last three years, up to a maximum £2,500 a month. To be eligible for this taxable grant, you will need to take in trading profits of no more than £50,000, and make the majority of your income from self-employment.
Directors will be entitled to 80% of whatever they put through PAYE.
- A taxable grant worth 80% of trading profits
- Up to a maximum of £2,500 per month for three months
- To be paid as a lump sum in June 2020
- HMRC will write to you if you are eligible
What you need to know
You do not need to apply for this scheme. HMRC has stated that they will write to you if you are eligible. It is not clear what evidence will be required to demonstrate that you have lost income.
Payments will be based on average profit over previous years and you will need to have filed your 2018/19 tax return. You have four weeks to do this. If you have not filed your 2018/19 accounts please contact us as soon as possible so that we can help with this.
Mortgage holiday / Rent holiday
Finally, don’t forget that most banks and landlords are offering 3-month mortgage/rent holidays. Please contact your Landlord or mortgage lender to arrange this.
If your business has been severely impacted by the crisis, please talk to us. If your business needs financial support, we can assist you to access funding via the CBILS.
We are still awaiting details of grants that are to be made available for certain types of business. We will write to our clients directly and share the information on our news pages as soon as we have confirmed details.
Once again, we urge you to take care and stay safe.