15 March 2021

Government Lending Schemes to Business

Some of the government-backed Coronavirus loan schemes are closing for applications on 31 March 2021 - here's a brief summary of what you need to know:

Coronavirus Bounce Back Loan

The scheme for loans between £2,000 and £50,000 targeted towards smaller businesses will not accept new applicants after 31 March 2021.

If you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top up your existing loan to your maximum amount. You must apply for the top-up by 31 March 2021.

The Chancellor has introduced Pay as you Grow repayment flexibilities, to Bounce Back loans, that includes an option to delay repayments for a further six months - the loan term can also be extended from six to ten years, and make interest-only payments for six months.

Coronavirus Business Interruption Loan Scheme (CBILS)

The most popular loan scheme for many small and medium-sized businesses, with loan provision up to £5 million, will also close for applications after 31 March 2021.

CBILS terms can be extended beyond six years, up to a maximum of ten years. However, at the time of writing, the Pay as you Grow delayed repayment option has not been bolted on to CBILS.

The Recovery Loan Scheme

From 6 April 2021 businesses of any size will be able to apply for the new recovery loan scheme.  Loans of up to £10 million will be available, these funds can be used for any legitimate business purpose - including supporting growth and investment.  This new loan scheme will remain open until 31 December 2021.

• The government guarantees 80% of the finance to the lender.
• Term loans and overdrafts will be available between £25,001 and £10 million per business.
• Invoice finance and asset finance will be available between £1,000 and £10 million per business.
• Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
• No personal guarantees will be taken on facilities up to £250,000, and a borrower's principal private residence cannot be taken as security.
• Businesses that have already obtained support from existing Coronavirus support schemes will still be eligible to apply for loans under the new scheme.