Government backed coronavirus loans – everything you need to know
Since the pandemic began wreaking havoc throughout the UK economy, the Government has been working hard to protect businesses across a diverse range of sectors, after many have been forced to close their doors during periods of lockdown.
However, many businesses have found it difficult to understand what financial support is actually available to them during lockdown, including whether they are eligible to apply for a Government backed coronavirus loan which have proved to be an invaluable lifeline to many businesses who are struggling.
And, if you’re struggling to get your head around the Government backed loans and how much you could borrow, you have certainly landed in the right place! We’ve created a helpful guide outlining everything that you need to know about the Government backed coronavirus loans.
The Government has introduced both the BBLS (Bounce Back Loan Scheme) and CBILS (Coronavirus Business Interruption Loan Scheme) in order to help UK small and medium sized businesses who are struggling due to the pandemic.
But who can apply for these loans?
If you’re considering applying for the BBLS you must be able to declare the following:
- You have been impacted by Covid-19
- Your business was established by 1 March 2020 and engaged in trading or commercial activity in the UK
- Was not a business in difficulty at 31 December 2019
- Is not already making use of the CBILS, the Coronavirus Large Business Interruption Loan Scheme (CLBILS)
- Has not declared bankruptcy at the time of application
- You derive more than 50% of its income from its trading activity
On the other hand, to apply for a CBILS, you must fit the following criteria:
- A UK-based business
- Have an annual turnover of no more than £45 million
- Have a borrowing proposal which the lender would consider viable
- Self-certify that you have been directly impacted by COVID-19
- Not have been classed as a business in difficulty
How much can I borrow?
If you opt for the BBLS, you can apply for a loan from £2,000 or 25% of your turnover, to a maximum of £50,000. The interest rate is 2.5% a year, which is one of the best interest rates you will find on the market. If you choose the CBILS you can apply for a loan of up to £5 million and the interest rate varies depending on the lender.
Why choose React Accountancy?
Here at React Accountancy, we provide trusted accountancy services to start-up, established and multi-national businesses across a diverse range of industries.
From the moment you get in touch, our approachable, friendly and professional team will go above and beyond to ensure that you receive the right advice, support and accountancy solutions for your business.
All of our team has years of experience in providing accountancy services that support your business including complex financial issues.
Get in touch today for further information about any of our services.
You can reach us on 01914324110 or contact us via email using firstname.lastname@example.org