Alert
Alert
04.02.20
The UK government’s economic response to the crisis has been substantial and aims to address the vast majority of companies and workers. Despite this, certain individuals and companies still “fall through the cracks” and may not be able to take advantage of the announced schemes. The situation remains fluid and new measures are being announced regularly, in line with Rishi Sunak’s promise to “do whatever it takes to support our economy through this crisis.”
A breakdown of each of the UK Government Funding Schemes (COVID-19) that have been announced to date follows below. Click a link below to view a particular scheme or here to download a table of all available measures.
Schemes
Coronavirus Business Interruption Loan Scheme (CBILS)
Business Rates Holiday for Retail, Hospitality and Leisure
Cash Grant for Retail, Hospitality and Leisure
Coronavirus Job Retention Scheme (CJRS)
Small Business Grant Funding
Statutory Sick Pay (SSP) Rebate
Time to Pay (TTP)
COVID Corporate Financing Facility (CCFF)
Business Rates Holiday for Nurseries
Value Added Tax (VAT) Deferral
Income Tax Deferral for the Self-Employed
Self-Employment Income Support Scheme (SEISS)
Protection from Eviction for Commercial Tenants
Companies House Support
Changes to Insolvency Laws
Coronavirus Large Business Interruption Loan Scheme (CLBILS)
Future Fund
Innovate UK Grants and Loans
Bounce Back Loan Scheme (BBLS)
Trade Credit Insurance Guarantee
Local Authority Discretionary Grants Fund
Summary
Under the scheme, small and medium-sized businesses (SMEs) with an annual turnover of up to GBP 45m that are experiencing cashflow disruptions due to coronavirus can access government-backed financing of up to GBP 5m through a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance.
Key features include:
The scheme may be used at the lender’s discretion for unsecured facilities of any value. The borrower always remains 100% liable for the debt.
Eligibility
The scheme is open to all UK-based SMEs with an annual turnover of no more than GBP 45m and with a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.
On 27 April, the government announced that it would be changing the viability test so that banks will solely be required to assess whether a business was viable prior to COVID-19. Companies applying to the scheme must not have been classed as a 'business in difficulty' on 31 December 2019 if applying to borrow GBP 30,000 or more.
Decision-making on eligibility for CBILS is fully delegated to the relevant accredited lenders.
The following trades and organisations are not eligible to apply: banks, building societies, insurers and reinsurers (but not insurance brokers), public sector bodies, and state-funded primary and secondary schools.
Fishery, aquaculture and agriculture businesses may not qualify for the full Business Interruption Payment by the government.
How to access
CBILS is now open for applications via the British Business Bank’s 40+ accredited lenders, who will then apply to the scheme.
A list of accredited lenders has been published and all major banks are offering the scheme.
In the first instance, businesses are encouraged to approach their existing lenders through their websites and to consider approaching other lenders on the list if they are unable to access the finance they need.
Additional details
When first announced, the government advised that lenders that were able to offer finance on normal commercial terms without the need to make use of CBILS would be required to do so.
On 2 April, the government expanded the scheme (with retroactive effect from 23 March) such that businesses are no longer required to establish a lack or absence of security prior to financing for facilities above GBP 250,000.
From Monday 6 April, the scope of the scheme was widened to include businesses that meet the requirements for a regular commercial facility, significantly increasing the number of businesses eligible for the scheme.
On 1 May, it was announced that the government's guarantee against 80% of the outstanding facility balance would no longer be subject to an overall cap per lender and that further education establishments were now eligible for the scheme.
Lenders are not permitted to request personal guarantees for loans under GBP 250,000. Personal guarantees may be requested for loans over GBP 250,000 (at the lender's discretion) but recoveries under these guarantees are capped at 20% of the outstanding balance under the CBILS facility after the proceeds of the business assets have been applied. In addition, a Principal Private Residence can not be taken as security to support a personal guarantee or as security for a CBILS-backed facility.
Summary
Under the scheme, businesses operating in the retail, hospitality or leisure sector in England will not have to pay business rates for the 2020-21 tax year.
There will be no rateable value limit on the relief.
Eligibility
Properties based in England that that are wholly or mainly being used as shops, restaurants, cafes, drinking establishments, cinemas and live music venues; for assembly and leisure (e.g. sports clubs, gyms or spas); or as hotels, guest and boarding premises and self-catering accommodation, will be eligible for the relief.
How to access
Local authorities will apply the business rates holiday directly to eligible businesses’ rates bills for the 2020-21 tax year.
Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
Additional Details
The Brexit Withdrawal Agreement negotiated with the EU provides that during a transition period EU State aid rules would continue to apply.
Following discussions with the European Commission, the UK government is satisfied that this relief is not a state aid and has instructed Local Authorities to award the relief to all eligible properties.
Guidance provided to Local Authorities states that they should prepare to award the relief ignoring current state aid rules and will be informed of the outcome of the application as soon as it is known.
Summary
Under the scheme, businesses operating in the retail, hospitality or leisure sector will receive a cash grant of up to GBP 25,000 per property.
Businesses in these sectors with a property that has a rateable value of under GBP 15,000 will receive a grant of GBP 10,000, while businesses with a property that has a rateable value of between GBP 15,001 and GBP 51,000 will receive a grant of GBP 25,000.
Eligibility
Businesses will be eligible if they are based in England, operating in the retail, hospitality and/or leisure sector and occupying properties that are wholly or mainly being used as shops, restaurants, cafes, drinking establishments, cinemas and live music venues; for assembly and leisure; or as hotels, guest and boarding premises and self-catering accommodation.
Businesses with a property that has a rateable value of GBP 51,000 or over are not eligible for this scheme.
Businesses which are not ratepayers in the business rates system, or which were liquidated or dissolved as of 11 March are not included in this scheme.
Eligible businesses can receive one grant per property and businesses cannot claim both the small business grant and the retail, hospitality and leisure grant on the same property.
How to access
Local Authorities will write to all eligible businesses with information on how to claim this grant.
Additional Details
Any enquiries on eligibility for, or provision of, the grant should be directed to the relevant Local Authority.
The grants are required to comply with European Commission's Temporary Framework on State Aid, adopted on 19 March 2020.
Grants under the scheme are subject to tax, provided the business has made a profit once grant income is included.
Summary
Under the scheme, all UK employers with a PAYE scheme will be able to access funding, in the form of a government grant, to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. This is to safeguard workers from being made redundant.
Until the end of July 2020, the government grants will cover 80% of the salary (up to a cap of GBP 2,500 per month) of “furloughed” workers, i.e., employees who are kept on their employer’s payroll but not required to work. The grants will also cover the associated National Insurance contributions (NICs) and minimum employer pension contributions for the furloughed employees. Employers can top up salaries further if they choose to, but this is not obligatory under the scheme.
From August 2020, government relief will gradually be tapered as follows:
CJRS was initially intended to run for four months, backdated from 1 March 2020 until the end of June. On 12 May, the government announced that the scheme would be extended by another 4 months to run until the end of October.
There is no limit to the amount of government funding available under the scheme.
Eligibility
All UK employers with a PAYE scheme will be eligible--this includes the public sector, Local Authorities and charities.
Agency workers, company directors, salaried members of LLPs, office holders, Limb (b) workers and contractors with public sector engagements in scope of IR35 off-payroll working rules may also be eligible for the scheme in certain circumstances.
Employers (in the public or private sector) receiving public funding for staff costs are not expected to furlough their employees if they are continuing to receive such funding.
The latest date on which an employee must have been employed to qualify for the scheme is 19 March 2020.
Employers must have created a PAYE payroll scheme on or before 19 March 2020 and have a UK bank account.
Employees will need to be officially designated as “furloughed,” i.e., employees who have been asked to stop working, but who are being kept on the payroll.
Any employees placed on furlough must be furloughed for a minimum of three consecutive weeks. When they return to work, they must be taken off furlough. Although an employee may be furloughed multiple times, each separate instance must be for a minimum of three consecutive weeks.
How to access
Employers will first need to officially designate affected employees as “furloughed workers,” and notify employees of this change.
On 20 April 2020, HMRC launched its online service to enable employers (or authorised agents claiming on their behalf) to submit information about furloughed employees and their earnings, make a claim and receive payments. The online portal can be accessed here.
Prior to using the online service, employers will need to calculate how much they can claim, either by obtaining professional advice or by using the government's online calculator (which can be accessed here).
After a claim has been made through the system, employers will be provided with a claim reference number. HMRC will then verify the claim and pay the claim amount via BACs within six working days.
Companies claiming under the scheme must keep records relating to their claims for at least 6 years.
Additional details
Changing the status of employees to “furloughed workers” remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments.
Furloughed employees can be on any type of employment contract, including agency contracts and flexible or zero-hour contracts.
Apprentices can also be furloughed and are permitted to continue their training during furlough.
Non-employees such as company directors and salaried members of limited liability partnerships may also be eligible under the scheme.
The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.
To be eligible, a furloughed employee may not undertake any work on behalf of the organisation, with employees working reduced hours not eligible for the scheme. On 29 May, the government announced that, from July 2020, furloughed workers will be able to return to work part-time.
On 24 April, the government announced that furloughed workers intending to take paid parental or adoption leave will be entitled to Statutory Maternity Pay, as well as other forms of Parental or Adoption Pay, based on their usual earnings rather than a furloughed pay rate.
On 12 May, the government announced that the scheme would be extended until the end of October 2020, having originally been due to close at the end of June 2020.
On 29 May, the government announced various changes to the CJRS, with further guidance set to be published on 12 June:
Summary
The scheme will provide a one-off grant of GBP 10,000 to small businesses that already pay little or no business rates because of small business rate relief (SBRR), rural rate relief (RRR) and tapered relief (TR), to help meet their ongoing business costs.
Scheme funding is expected to be available from 1 April 2020.
Eligibility
The grant will be available to businesses based in England that were already receiving SBRR, RRR and/or TR as of 11 March, 2020, and which occupy property.
Eligible businesses can receive one grant per property and businesses cannot claim both the small business grant and the retail, hospitality and leisure grant on the same property.
How to access
Local Authorities will write to all eligible businesses with information on how to claim the grant.
Additional details
Any enquiries on eligibility for, or provision of, the grant should be directed to the relevant Local Authority.
The grants are required to comply with European Commission's Temporary Framework on State Aid, adopted on 19 March 2020. Grants under the scheme are subject to tax, provided the business has made a profit once grant income is included.
Summary
Under the scheme, SMEs will be able to reclaim SSP (set at GBP 94.25 per employee per week before 6 April 2020 and currently set at GBP 95.85) paid for staff sickness absence due to coronavirus.
This refund will cover up to two weeks’ SSP per eligible employee who has been off work because of coronavirus.
The government is currently legislating for SSP to be paid from day 1 of absence from work and this will apply retrospectively from:
Eligibility
All UK based businesses with a PAYE payroll scheme and employing fewer than 250 employees as of 28 February 2020 will be able to reclaim expenditure for any employee who is unable to work due to:
The scheme covers all types of employment contracts including full-time and part-time employees, employees on agency contracts and employees on flexible or zero-hour contracts.
How to access
Employers can make claims through a new online service that launched on 26 May 2020.
In order to prepare to make a claim, employers should keep records of all the SSP payments that they wish to claim from HMRC.
HMRC advises that employers should receive payments within six working days after submitting their application.
Additional details
The government advises that employers should maintain records of staff absences and payments of SSP, but that employees will not need to provide a GP fit note.
If evidence is required by an employer, employees with symptoms of coronavirus can request an isolation note from NHS 111 online and those who live with someone that has symptoms can request a note from the NHS website.
Claims under the scheme are required to comply with European Commission's Temporary Framework on State Aid, adopted on 19 March 2020.
Summary
HMRC is dedicating additional resources to its existing TTP scheme, which allows entities in financial distress to defer current tax liabilities into future installments.
HMRC has announced that up to 2,000 call handlers are being made available to support businesses and individuals in need and has set up a dedicated helpline for dealing for coronavirus-related TTP enquiries.
Eligibility
All UK tax-paying businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible for TTP but arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
How to access
HMRC has set up a dedicated helpline for dealing with coronavirus-related TTP enquiries which can be accessed by calling 0800 024 1222 between 8am and 4pm on Monday to Friday.
Additional details
Applicants applying for TTP should be prepared to have a detailed conversation with HMRC regarding their specific circumstances, financial situation and what measures are being taken to get tax payments in order.
If, following discussion, HMRC believes that applicants can pay immediately they will be required to do so.
If HMRC offers extra time to pay, they will set up a plan to pay installments by Direct Debits on mutually agreed dates.
Summary
Under the scheme, the Bank of England will assist larger companies to bridge coronavirus disruption to their cash flows through the purchase of short-term debt in the form of commercial paper.
The facility will offer financing on terms comparable to those prevailing in markets before the crisis.
The scheme will operate for a minimum of 12 months and for as long as required to relieve cash flow pressures on firms that make a material contribution to the UK economy.
Eligibility
The scheme is open to non-financial (i.e., not PRA or FCA regulated), UK-incorporated firms (including those with foreign-incorporated parents) that make a material contribution to the UK economy and can demonstrate that they were in sound financial health prior to the impact of coronavirus.
In practice, this means those companies that had a short or long-term rating of investment grade (e.g., a credit rating of A-3/P-3/F-3/R3 from at least one of Standard & Poor’s, Moody’s, Fitch and DBRS Morningstar), as of 1 March 2020, or equivalent.
Companies who wish to use the scheme do not need to have issued commercial paper before.
How to access
CCFF is now available for applications. In order to access the facility, companies should in the first instance liaise with their banks.
For those companies whose banks do not issue commercial paper, a list of banks that are able to assist has been published here.
Additional details
Companies that do not have a public investment grade rating may consider two options:
On 19 May 2020, the government announced that issuers participating in the CCFF will be required to provide a letter of commitment, restricting their capital distributions and senior pay (including cash bonuses), if:
Summary
Under the scheme, nurseries in England will not have to pay business rates for the 2020-21 tax year.
Eligibility
Properties registered on Ofsted’s Early Years Register and which are wholly or mainly used for the provision of the Early Years Foundation Stage will be eligible for the relief.
How to access
Local authorities will apply the business rates holiday directly to eligible nurseries’ business rates bills for the 2020-21 tax year.
Additional Details
The Brexit Withdrawal Agreement negotiated with the EU provides that during a transition period EU state aid rules would continue to apply.
Following discussions with the European Commission, the UK government is satisfied that this relief is not a state aid and has instructed Local Authorities to award the relief to all eligible properties.
Summary
Under the scheme, VAT payments will be deferred for a period of three months between 20 March 2020 and 30 June 2020.
VAT registered businesses will not need to make a VAT payment during this period and will be given until the end of the 2020-2021 tax year to pay any liabilities accumulated during the deferral period.
Eligibility
All VAT-registered UK businesses are eligible.
How to access
This is an automatic offer and no application is required.
The government advises that customers who normally pay VAT by direct debit should cancel their direct debit with their bank in sufficient time so that HMRC do not attempt to automatically collect on receipt of the customer’s VAT return.
Additional details
VAT returns will still need to be submitted to HMRC on time.
VAT refunds and reclaims will be paid by the government as normal during the deferral period.
Summary
Under the scheme, income tax payments due on 31 July 2020 under the Self-Assessment system may be deferred to 31 January 2021.
No penalties or interest for late payment will be charged in the deferral period.
Eligibility
All self-employed persons are eligible.
How to access
This is an automatic offer and no application is required.
Additional details
The deferral is optional and HMRC has recommended that taxpayers who are able to make their payment on account should do so.
Summary
From 13 May to 13 July 2020, self-employed people or members of a partnership are able to claim a taxable grant worth 80% of the average monthly trading profits for the previous three tax years, up to a maximum of GBP 2,500 per month (and capped at a total of GBP 7,500).
In August 2020, applicants will be able to claim for a second and final taxable grant worth 70 % of their average monthly trading profits, paid out in a single installment covering a further 3 months’ worth of profits, and capped at GBP 6,570 in total.
Eligibility
To be eligible for the SEISS, applicants must:
Self-employed trading profits must be less than GBP 50,000, and self-employment must comprise more than half of income.
The government has launched an online tool here for potential applicants to check whether they are eligible for the scheme.
Eligibility
The SEISS opened for applications for the first grant on 13 May 2020.
HRMC assigned eligible individuals with a specific date to make an application using their Unique Tax Reference number (UTR). this can be checked on the HMRC online checker which can be accessed here. Individuals will not be able to make a claim prior to their assigned claim date, but can make a claim after that day and up until 13 July 2020.
Once a claim is approved, applicants will receive their payment within six working days of completing their claim.
Individuals must claim themselves and not via a tax agent or adviser, as this will trigger a fraud alert and cause a significant delay to receiving payment.
Applications for the second grant will be opened in August 2020 and further guidance will be provided to applicants in due course.
Additional Details
The grants will be subject to Income Tax and National Insurance contributions but does not need to be repaid.
Those receiving the grant can continue to work or take on other employment including voluntary work.
On 29 May, the government announced that the SEISS was being extended, with a second grant being made available in August 2020. The eligibility criteria are the same for both grants and an individual does not need to have claimed the first grant to receive the second grant. Further guidance on the second grant will be published on 12 June.
Summary
Commercial tenants who cannot pay their rent because of COVID-19 will be protected from eviction.
These measures mean no business will automatically forfeit their lease and be forced out of their premises if they miss a payment up until 30 June 2020.
There is the option for the government to extend this period if needed.
Eligibility
All commercial tenants in England, Wales and Northern Ireland are eligible.
How to access
No action is required.
Additional details
This is not a rental holiday. All commercial tenants will still be liable for the rent.
The government is also considering the impact on commercial landlords and is due to build in support for them too.
Summary
UK companies can now apply to Companies House for a three-month extension for filing their accounts if their business has been affected by COVID-19.
On 16 April, Companies House announced a temporary pause of the striking off process to provide affected businesses with additional time to update their records and avoid being struck off the register.
Eligibility
Companies are required to make an application for the extension but those citing an issue related to COVID-19 will be granted an automatic extension.
For companies who apply for voluntary dissolution, the striking off application will be registered at Companies House and a notice will be published in the Gazette. After this point, any further action to strike off the company will be suspended.
These changes do not apply to businesses being dissolved as a result of an insolvency procedure (e.g. liquidation).
How to access
An application to extend the deadline for filing the accounts can be made here.
Additional Information
The changes to the strike-off policy and late filing penalties will be reviewed by the government from 1 June 2020 and guidance will be updated according to the situation at that time.
Summary
The UK Government has announced planned changes to its existing insolvency framework to support companies during the coronavirus crisis. These measures include:
How to access
The legislation to give effect to these announced changes is set out in the Corporate Governance and Insolvency Bill, which was presented to Parliament on 20 May. The exact timing and applicability of these changes is yet to be finalised.
Summary
Under this scheme, large businesses will be able to access government-backed bank loans of up to GBP 200m (increased on 26 May 2020 from the previously announced limits of GBP 25m for businesses with a turnover up to 250m and GBP 50m for businesses with higher turnover).
The maximum amount able to be borrowed by a firm under the scheme is the higher of (i) double the annual wage bill in respect of UK business of the borrower; (ii) 25% of the turnover of the borrower’s UK business in 2019; or (iii) an amount to cover the liquidity needs of the borrower’s UK business for 12 months, as justified and self-certified by the borrower.
The scheme is targeted at businesses that were viable prior to COVID-19 but which are now facing significant cash flow difficulties that are affecting their short-term viability.
Businesses will be able to access financial products such as short-term loans, revolving credit facilities (including overdrafts), invoice finance and asset finance, on terms of up to three years.
Lenders will be provided with a government-backed guarantee against 80% of the outstanding facility balance.
The borrower always remains 100% liable for the debt.
Eligibility
To be eligible for the scheme the business must:
The scheme is open to businesses from any sector except credit institutions, building societies, insurers and reinsurers (but not insurance brokers), public sector bodies, and state-funded primary and secondary schools.
How to access
The CLBILS is now open for applications via the British Business Bank's accredited lenders, who will then apply to the scheme.
The list of 12 accredited lenders has been published here and most major banks are offering the scheme. Term loans and revolving credit facilities over GBP 50m will be offered by approved lender that have secured additional accreditation, listed here.
In the first instance, businesses are encouraged to approach accredited lenders through their websites, and to consider approaching other lenders on the list if they are unable to access the finance they need.
Additional details
Lenders are not permitted to request personal guarantees for loans under GBP 250,000. Personal guarantees may be requested for loans over GBP 250,000 (at the lender's discretion) but recoveries under these guarantees are capped at 20% of losses after all other recoveries have been applied.
On 16 April 2020, the government announced that the scheme would expand to all viable businesses with a turnover of more than GBP45m, and that businesses with a turnover of more than GBP 250m can borrow up to GBP 50m. Businesses with a turnover of more than GBP 500m had originally not been eligible for the scheme.
On 4 May 2020, the government announced that further education establishments would now be eligible for the scheme.
On 19 May 2020, the government announced that from 26 May, the maximum loan size available under the CBILS would increase from GBP 50m to 200m to enable larger firms that did not previously qualify for the COVID-19 Corporate Finance Facility to be better able to access enough finance to meet their cashflow needs during the pandemic. The maximum size for invoice finance and asset finance facilities remains at GBP 50m.
Any businesses borrowing in excess of GBP 50m through the scheme are subject to a number or restrictions, which include:
Summary
Under this scheme, innovative companies that are facing financial difficulties due to COVID-19 will be able to access convertible loans between GBP 125,000 and GBP 5m, subject to at least equal matched funding from third party private investors.
The government loan shall make up no more than 50% of the bridge funding provided to the company and the remaining amount must be matched by private investor(s). Notwithstanding the GBP 5m cap on government loans provided under the scheme, there is no cap on the amount that a matched private investor may loan to the company, meaning that there is no cap on the aggregate bridge funding provided to the company.
The government is committing an initial GBP 250m towards the scheme, but this amount will be kept under review.
Eligibility
To be eligible for the scheme the business must:
If the business is a member of a corporate group, only the ultimate parent company (if UK registered) will be eligible to receive the loan.
An eligibility checker has been published here.
The investor(s) must fall within any of the following categories:
How to access
The Future Fund scheme opened for applications on 20 May 2020 and is expected to run until the end of September 2020.
The application process is investor-led; an investor (or a lead investor of a group of investors) must apply in connection with an eligible company. The company must then confirm the accuracy of the investment application details before submitting the full application. If the application is approved, all parties will execute a convertible loan agreement (template published here) and satisfy the conditions set out in the agreement before the funds are released.
Additional details
The maximum term of the loan is 36 months and can not be repaid early other than with the agreement of all of the investors.
The bridge funding shall automatically convert into equity on the company’s next qualifying funding round at a minimum conversion discount of 20% (or higher, if a higher rate has been agreed between the company and the matched investor(s)) to the price set by that funding round.
There will be a company repayment right in respect of the accrued interest. A minimum interest rate of 8% per annum (non-compounded) will be charged on loans under the scheme, to be repaid on maturity of the loan, at which point it will either be repaid or convert to equity.
The bridge funding must be used solely for working capital and may not be used by the company to:
Summary
Innovate UK, the national innovation agency, has announced that it will:
The scheme launched on 15 May 2020 and first payments are expected to be made by early June 2020.
Eligibility
These measures are targeted towards:
The types of SMEs that should be referred for support would meet the following criteria:
All applications will be judged on merit. The specific criteria for each product will vary, being proportionate to the amount and purposes of the funding requested, and Innovate UK’s assessment of risk.
How to access
A questionnaire has been published by Innovate UK which will help guide prospective applicants, based on their specific circumstances, to the most suitable funding option and appropriate application form.
Applicants are advised to carefully consider their business needs before applying as awards will only be made where such needs are established and compelling relative to other applications.
Additional details
The continuity grants and loans available under the scheme must be applied to specific outstanding costs relating to a live project, which have not already been covered through the existing Innovate UK award.
Continuity grants will be paid in full, with no requirement for matched funding from the recipient. 90% of the grant will be paid in advance, with the remaining 10% paid upon a determination that the organisation has continued its innovation activity as set out in its application.
Continuity loans will have a maximum term of 7 years, during which drawdowns may be made only during the first 2 years of the loan.
Personal guarantees will not be required under the loans, however, it is expected that security will be taken in the form of a mortgage debenture, where available.
Funding will not be provided to support furloughed staff, or where the project will not be continued during the COVID-19 pandemic.
Summary
Under this scheme, businesses will have access to government-backed loans from GBP 2,000 up to 25% of the business turnover, with a maximum loan of GBP 50,000. The funds will be available to businesses within days of applying in order to provide immediate support to businesses in need.
Loans under the scheme will be interest free for the first 12 months and any additional fees will be paid by the government.
Loan terms will be up to 6 years. No repayments will be due during the first 12 months, but early repayment is permitted without early repayment fees. The government has agreed with lenders that a flat interest rate of 2.5% will be charged for the remaining period of the loan.
The government will provide lenders with 100% guarantee for the loans.
Eligibility
This scheme is targeted towards small businesses in need of vital cash injections to keep operating and that:
Businesses classed as a 'business in difficulty' on 31 December 2019 will be required to confirm their compliances with additional state aid restrictions.
The scheme is not open to banks, insurers and reinsurers (but not insurance brokers), public sector bodies, grant-funded further-education establishments and state-funded primary and secondary schools.
How to access
The scheme launched on Monday 4 May. Businesses can apply online through a short form.
The scheme will be delivered through a network of accredited lenders.
Eligible companies will be subject to standard fraud, anti-money laundering and know your customer checks prior to any loan being made.
Additional details
Companies that have already received a loan of up to GBP 50,000 under CBILS, CLBILS or CCFF and wish to transfer it into the BBLS can arrange to do so with their lender until 4 November 2020.
The borrower always remain 100% liable for the debt.
Personal guarantees are not permitted under the scheme, and no recovery action can be taken over a principal private residence or principal private vehicle.
Summary
The government will temporarily guarantee business-to-business transactions currently supported by Trade Credit insurance, to ensure that the majority of insurance coverage will be maintained across the market.
The government guarantee will be delivered through a temporary reinsurance agreement with insurers currently operating in the market.
The guarantee will be targeted towards COVID-19 economic challenges, and will provisionally last until the end of the year.
Eligibility
The government support is targeted towards businesses with supply chains (e.g. within the manufacturing and construction sectors) that rely on Trade Credit Insurance and who are experiencing difficulties maintaining cover due to COVID-19.
Additional details
The government has confirmed that it will work with businesses on the full details of the scheme to ensure that businesses are supported. Further information is due to be announced in due course.
Summary
Under the scheme. small and micro businesses with fixed properties with fixed property costs and that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund schemes may be eligible for grants of up to GBP 25,000.
Eligibility
The scheme is targeted at small and micro businesses that are:
Local councils have been asked by the government to prioritise businesses such as:
Insolvent businesses and those in administration or that have received a striking-off notice are not eligible for the scheme.
How to access
Companies may visit their local council’s website to find details of how to apply. The council will then run an application process and decide whether to offer a grant.
Additional details
The grants are required to comply with European Commission's Temporary Framework on State Aid, adopted on 19 March 2020.
Grants under the scheme are subject to tax, provided the business has made a profit once grant income is included.