The refurbishment loan program up to £ 10m replaces CBILS and BBLS
Rishi Sunak has announced the Recovery Loan Scheme to replace the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme.
UK businesses of all sizes can apply for a loan or overdraft of between £ 25,000 and £ 10 million by the end of 2021. Asset and bill financing between £ 1,000 and £ 10 million is also available. All have a state guarantee of 80 percent.
The funding term for term loans and asset finance facilities is up to six years. The term for overdrafts and invoice financing is up to three years.
No personal guarantees are provided for facilities up to £ 250,000 and, as before, a borrower’s primary private residence cannot be considered collateral.
The renovation loan program will open on April 6th and will run until December 31st, subject to review. Like CBILS and the Bounce Back Loans, these will be available through a network of accredited lenders whose names will be published in the near future. Application details will be announced in the coming weeks.
Once received, the funding can be used for any legitimate business purpose, including growing and investing.
Sunak said, “Even with the new Restart Grants, some companies will need loans to hold out. With the end of the repayment and business interruption credit systems, we are introducing a new clawback credit program to take their place. “
Can I apply for the Recovery Loan Scheme?
If your company is based in the UK you can apply, but it must:
- Be or would be viable if it weren’t for the pandemic
- Have been affected by the coronavirus pandemic
- Don’t be in any collective bankruptcy proceedings – further details will be announced in due course
Banks, building societies, insurers and reinsurers (but not insurance brokers); public bodies; and
State-funded primary and secondary schools cannot apply.
Can I apply for the Recovery Loan Scheme if I have had CBILS or Bounce Back Loan support?
Yes, as long as you meet all other eligibility criteria.
What about Covid-19’s current government loan programs?
The CBILS and bounce-back loan programs will end on March 31, 2021 as planned. They were launched last year to help troubled companies that struggled in the early stages of the pandemic.
Small Business has partnered with FundingOptions.com to help you find the right financing for your business. You can find your page here.
In response to the budget announcement, Andrew Sanford, Partner at Blick Rothenberg said, “It is welcome news to give companies the opportunity to apply for the new renovation loan program by the end of 2021. However, companies are demanding long-term funding support. “
Lenders have previously raised concerns about delays in determining the details of the system and their ability to prepare for the launch of the credit system.
The government has also promised additional grants for the self-employed, a three-month extension of vacation rates, and an extension of the vacation program through September.
Budget 2021 and what it means for small businesses