Grant and Loan Support

The Coronavirus Business Interruption Loan Scheme – offering loans of up to £5million for SMEs through the British Business Bank – is launching this week.

The aim is to support the continued provision of finance to the UK’s small and medium sized businesses during the Covid-19 outbreak.

The government says it will provide a guarantee of 80 per cent on each loan – subject to a per-lender cap on claims – to give lenders further confidence in continuing to provide finance to SMEs.

In addition, the government has announced that it will not charge businesses or banks for this guarantee, which will potentially enable a ‘no’ credit decision from a lender to become a ‘yes’.

Businesses can access the first 12 months of the finance interest free, as government will cover the first 12 months of interest payments. The business remains liable for repayments of the capital.

You are eligible for the scheme if your business is UK-based, with turnover of no more than £45m per year and meets the other British Business Bank eligibility criteria.

The full rules of the scheme and a list of accredited lenders is available on the British Business Bank website (www.british-business-bank.co.uk).

All the major banks will offer the scheme once it has launched. There are 40 accredited providers in all.

You should talk to your bank or finance provider – not the British Business Bank – as soon as possible and discuss your business plan with them.

This will help your finance provider to act quickly. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

Retail, hospitality and leisure businesses

The Retail and Hospitality Grant Scheme will provide businesses in these sectors with a cash grant of up to £25,000 per property.

Businesses with a rateable value of under £15,000 will receive a grant of £10,000. Those with a rateable value of between £15,001 and £51,000 will receive £25,000.

The aim is to support retail, hospitality and leisure businesses hit by the crisis. Properties eligible range from cafes and shops to cinemas, hotels and self-catering holiday accommodation.

Businesses don’t need to do anything to access the scheme. Local councils will write to them if they are eligible.

Other measures being introduced include:

• Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs. Your local authority will write to businesses if they are eligible

• 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