Bounce-back loans

UPDATE: The government’s offer of ‘bounce-back loans’ for small business was launched yesterday (Monday, 04 May) and you can apply for one here.

More than 110,000 business applied for the low-cost loans on launch day, the FT reports.

Banks providing the loans are confident they can provide the funds by the next day and the software systems are coping with the high uptake of almost an application every two seconds.

WHAT: The ‘bounce-back loans’ will provide easier access to cash for small companies that had been struggling to access existing government-backed lending schemes. Small businesses can apply for loans of up to 25% of their turnover, up to £50,000.

Borrowers will not have to pay any fees and interest for the first 12 months of the loan, with no repayments due for the first 12 months.

HOW:  You can find more information here.

Furlough wages payment

UPDATE: Over six million people are now being paid through the furlough scheme with 800,000 employees using it, according to HMRC figures reported in the FT yesterday (Monday, 4 May).

WHAT: The government’s scheme to help companies pay for staff they have had to put on temporary leave or ‘furlough’ has been open for two weeks.

Known as the Coronavirus Job Retention Scheme (CJRS), it launched earlier than the end-of-April due date. The government says its system can process up to 450,000 claims an hour.

Employers can claim for 80% of their employees’ wages plus any employer National Insurance and pension contributions, but there are criteria to satisfy.

HOW: Find out if your firm is eligible to claim for wages for employees on temporary leave (‘furlough’) here.

Coronavirus Business Interruption Loan Scheme (CBILS)

WHAT: Under CBILS, SMEs with up to £45m turnover and considered ‘viable businesses’ can access one-year interest free loans from a group of 40 lenders managed by the British Business Bank. This scheme had to be overhauled after complaints about difficulty of accessing the loans.

The government guarantees 80% of this loan to give banks the confidence to lend.

HOW: Apply for a CBILS loan here.

Help for ‘innovative’ start ups

UPDATE:  The government launched a £1.25bn support package on 20 April for venture-capital backed businesses that are “driving innovation”, ranging from the tech to life sciences sectors.

The government is partnering with the private sector to launch a £500m co-investment fund for high-growth companies impacted by the COVID-19 crisis. Money put up by private investors of between £125,000 and £5m will be matched by state-backed loans that can covert into equity.

SMEs focusing on research and development will also benefit from a £750m pot of grants and loans.

HOW: The scheme will be launched in May – you can find more information here.

Loans for larger businesses

Initially for SMEs with annual turnovers of under £45m, CBILS has now been extended to the so-called ‘squeezed middle’ of firms in the £45m-250m turnover range.

Businesses with turnover in this bracket were then allowed to apply for government-backed loans of up to £25m.

UPDATE: Now firms with more than £250m can apply to borrow up to £50m from lenders.

HOW: Apply for a CBILS loan here.