Government loans and grant schemes 

We have produced this guide to provide you with an overview of these measures. Information is still being released and we will update our information for members as soon as it becomes available. Last update: 5th November 2020

Bounce back loans

At a glance: What has changed? 

  • You can now apply for this loan until the 31st January 2021 
  • If you have already taken out a Bounce Back Loan but did not borrow your maximum (the lower of £50,000 or 25% of your turnover), then you can extend your loan. You can make use of this option once.  

 

What is the Bounce Back loans scheme? 

Bounce Back loans are loans of between £2000 and £50,000 capped at 25% of turnover.  

If you get one of these loans you will not have to make any repayments for the first 12 months and the government will cover your first year’s interest payments.  

You can choose to repay your loan over 10 years instead of 6 by extending it. 

You also have the option to: 

  • Move temporarily to interest only repayments for up to six months 
  • After you have made at least six payments, you will be able to pause repayments entirely for up to six months  

The government is calling these measures “pay as you grow”. 

Note that you can only apply for one of the CBIL and the Bounce Back loan.  

 

Coronavirus Business Interruption Loans, Coronavirus Large Business Interruption Loans and the future fund.

 At a glance: What has changed? 

  • You can now apply for all of these loans until the 31st January 2021 

 

What is Coronavirus Business Interruption Loans Scheme?  

The CBILS is a scheme for small to medium businesses that allows you to borrow up to £5million.  

The government offers an 80% guarantee to the lender which should give lenders the confidence to lend to SMEs. It is for UK based businesses with a turnover of under £45 million 

If you get one of these loans you will not have to make any repayments for the first 12 months and the government will cover your first year’s interest payments.  

You will need to show that you have a business that would have been viable if not for the pandemic and has been adversely affected by the pandemic. 

If you want to borrow £30,000 or more, you will need to show that your business wasn’t classed as a “business in difficulty” on the 31st December 2019.  

The government has allowed lenders to extend the terms of a loan for up to 10 years. 

Most SMEs (small or medium enterprises) are eligible except for banks, insurers, reinsurers, public sector bodies, or state funded primary and secondary schools.  

You can apply for these loans from a participating lender- and can find out more here 

 

What is the difference between Bounce Back Loans and CBILs? 

You can only apply for one of the Bounce Back Loan and the CBILS.  

The differences include: 

  • The CBILs has a partial guarantee of 80% from the government whilst the Bounce Back loan is 100% guaranteed  
  • The maximum lending amount for the CBIL is £5million, whereas you can only borrow up to £50,000 under the Bounce Back loan 
  • The minimum BBL is £2000, whereas the minimum CBIL is £50,001  
  • The interest rate on the BBL is 2.5% and there are no fees. The interest rate and fees on the CBIL are set by the lender 
  • With the Bounceback loan if you did not borrow your maximum amount, then you can extend it once.  
  • The Bounceback loan can be repaid over 10 years; with many lenders, you apply initially for a six-year term and then to extend it. For the CBILS many banks are offering terms six years for overdrafts and invoice finance facilities, and up to three years for loans and asset finance facilities. However, the government has said  loan terms can be up to ten years.  

You can convert CBILS of less than £50,000 into a Bounce Back loan.  

 

What is the Coronavirus Large Business Interruption Loans Scheme (CLBILS)? 

This is a loan for businesses with turnover about £45 million. You can find out more about it here 

 

What is the coronavirus Future Fund? 

 This is a fund for UK businesses that have matched funding from private investors. You can find out more about it here. 

 

Cash grants: Local Restrictions Support Grants 

On the 9th October the Government also announced, in England only a cash grant that will never have to repaid, for businesses forced to close by lockdown restrictions.  On the 24th October, further grants were announced for businesses which are not legally closed but are affected by the restrictions. These grants will be administered by local authorities.  

 

For businesses that are forced to close due to lockdown: 

  • Grants will be available to companies forced to close for at least 2 weeks 
  • Businesses with properties with a rateable value of £15,000 or under will receive grants of up to £1,334 per months 
  • Properties with a rateable value between £15,000 and £51,000 will receive up to £2000 per month 
  • Properties with a rateable value of £51,000 or over will receive grants of £3000 per month 

£1.3 billion funding has been granted to the Scottish, Welsh and Northern Ireland administrations, which may choose to implement a similar policy. 

 

For businesses that were affected by local restrictions between 1st August and 5th November.  

Grants of up to £2,100 a month have been made available, primarily for businesses in hospitality, accommodation and leisure, which may be adversely affected by the restrictions in high alert level areas (tier 2 or 3). These grants will be administered by local authorities, who will receive funding based on the rateable value of the businesses in their areas.  

  • The smallest businesses, with properties with a rateable value of £15,000 or less could get a grant of up to £934 per month 
  • For those with a rateable value between £15,000 and £51,000 grants could be £1,400 per month 
  • For those with a rateable value of £51,000 or more, grants could be of £2,100 per month

This is just a guide, because local authorities will determine exactly what funding each business gets.