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News & Blog

COVID-19 and Business Loans

Posted: 20th March 2020

There have been various measures implemented to support businesses through this period of disruption caused by COVID-19.

The various HMRC Time to Pay options, Business Rates changes & Statutory Sick Pay elements are covered in our specific COVID-19 Tax blog (click here to read), but this page provides a summary on the business loans available – and what we know so far as to who will be eligible and how they will work.

At French Duncan we’re aware many businesses will face challenges ahead, but we’re here to help and support, and you can contact us at any time. 

This article was published 1pm Thursday 19th March, but will be updated moving forward as more details are announced – so please check back again soon.

Summary of loans available:

  • Small business grant funding of £10,000 for all business receiving small business rate relief or rural rate relief.
  • Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value of £15,000 to £51,000
  • The Coronavirus Business Interruption Loan Scheme (“CBILS”) offering loans of up to £5 million for SMEs through the British Business Bank (more details below)
  • A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans. Referred to as the Coronavirus Corporate Financing Facility, this is designed to provide a quick and cost-effective way to raise working capital via the purchase of short term debt.  This will support companies which are fundamentally strong, but have been affected by a short term funding squeeze, enabling them to continue financing their short term liabilities.  Further details, including on how to access this funding will follow soon, and the scheme are due to be available from the week commencing 23 March 2020.

The full details are still under development and as above, this blog will be updated with full details when we have them.  At French Duncan we have a lot of experience in grant funding and loan agreements, so will be able to help you through our dedicated teams covering Corporate Advisory, Business Restructuring, Corporate Taxation & HR Services.

Coronavirus Business Interruption Loan Scheme (“CBILS”):

The recent announcement regarding this funding scheme (including loans, overdrafts, asset finance and invoice finance) outlines that the scheme will become available in week commencing 23 March 2020.  Summary details available at present are:

  • Funding will be provided by the British Business Bank through participating providers offering more attractive terms for both businesses applying for new facilities and lenders.
  • The lender receives a government-backed guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’.
  • The Government will cover the first 6 months of interest payments. The business remains liable for repayments of the capital.
  • The maximum value of a facility provided under the scheme will be £5 million.

Full eligibility criteria will be published in due course but to be eligible for support via CBILS, the  business must:

  • Be UK based, with turnover of no more than £41 million per annum.
  • Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support – see below).
  • Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years.
  • Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements.
  • Finance terms are from three months up to ten years for term loans and asset finance and up to three years for revolving facilities and invoice finance.

Please note that a limited number of further eligibility restrictions will apply.

Almost all business sectors are eligible, however there are a small number of excluded/restricted sectors arising primarily from EU de minimis-State aid rules.

Our team work with the majority of the providers in Scotland on a regular basis and will be able to assist you through the application process once things become clearer.  Again this blog will be updated as more details are available.

Contact details:

Whilst some of our staff are currently working from home, all of the above can be contacted on their email addresses or on 0141 221 2984.

Other COVID-19 Information:

We also have COVID-19 / Coronavirus blog articles, which will be kept updated, on:

Business Comment

Business Comment is the Edinburgh Chamber of Commerce’s bi-monthly magazine. It provides insight on Edinburgh’s vibrant business community, with features on the city’s key sectors, interviews with leading figures and news on new business developments in the capital.
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