Keeping Your Business Healthy – Government Announces ‘Coronavirus Business Interruption Loan Scheme’
In an effort to support small to medium sized business who are facing the uncertainty and disruption caused by COVID-19, the British Business Bank has confirmed that a new temporary Coronavirus Business Interruption Loan Scheme will launch on Monday 23rd March 2020.
Whilst COVID-19 is of course a health crisis, there are great concerns regarding the additional by-product of an economic crisis, with businesses concerned how they will pay rent, salaries and suppliers.
Eligibility requirements are for the business to be UK based, and employing fewer than 250 employees as of 28th February 2020.
The Government has advised that it will provide lenders with a guarantee of 80% on each loan, to encourage lenders in providing finance by way of bank lending and overdrafts. There will be no charge for this guarantee, and businesses can access the first 6 months of finance without interest.
Of course, it is pertinent to remember that the borrower will remain liable for the debt incurred.
All major banks will offer the scheme, with the maximum value of a loan provided set at £5 million pounds – a substantial increase from the initially suggested £1.2 million. Thankfully, the scheme is expected to take no longer than a standard application and should be a relatively simple process.
Further measures are being introduced in order to support businesses paying business rates and sick pay to their employees. The Government has also confirmed they will introduce a ‘holiday’ from business rates for the retail, hospitality and leisure sectors for the 2020 to 2021 tax year.
The Corporate and Commercial team at O’Donnell Solicitors headed by Director James O’Donnell has the expertise to advise on all your business’ needs, particularly at this challenging time. We can be contacted at 01457 761 320, our Head Office at Appleby’s Business Centre, 3 Mossley Road, Grasscroft, OL4 4HH or via email james@odonnellsolicitors.co.uk.
