Here we pick our most relevant announcements from the Chancellor of the Exchequer’s 2024 Autumn Budget...
As a response to the coronavirus crisis, the government has launched the Business Interruption Loan Scheme.
The Business Interruption Loan Scheme, along with the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme, supports SMEs during the unprecedented coronavirus outbreak.
In this short article, we'll explain how it works and how to access it. For more information, check out the government business support page.
If you’d like more information about all the new schemes and rule changes, check out our Coronavirus Tips. And be sure to visit our Coronavirus Update page.
How It Works
Your business can access finance up to £5 million from one of a number of accredited lenders. These are banks and specialist lenders who have signed up to the scheme. The money can come in the form of:
- Term loans
- Overdrafts
- Invoice finance
- Asset finance
Although you remain 100% liable for the debt, the government partially guarantees repayment. This is to encourage the bank to lend to you.
In addition, the government pays the first 12 months of interest payments and charges (the maximum repayment period is 6 years). And the Big Four banks have agreed that they will not take personal guarantees as security for lending below £250,000.
How To Access It
You are eligible for the scheme if your business:
- Is based in the UK
- Has an annual turnover of no more than £45 million
- Is viable if not for the coronavirus outbreak (according to the lender)
- Will be able to trade out of short/medium term difficulty with a loan (according to the lender)
The scheme is open now. To apply, contact your lender directly. It is then up to them if they decide to offer you the loan. If you get turned down by one lender, you are free to approach another one.
Final Thoughts
If your business is struggling with cash flow, then you should definitely consider the scheme. It could give you some short term liquidity to ensure that you can pay your suppliers until you get back on your feet.
Remember though, the money will have to be paid back at some point. You should make sure that the terms are suitable and that you can afford it.
With all the uncertainty surrounding the coronavirus crisis, things are changing every day. We'll have more information as soon as it becomes available. Be sure to check our blog for updates.
And if you'd like to discuss the scheme, please get in touch. We are staying on top of all the announcements from the government and can help you navigate this challenging time.
