Businesses can access government support from today (Monday 23 March) to keep operating in the face of the coronavirus pandemic.
More than £330bn of loans and guarantees to help firms continue operating is available for applications from the two schemes launching today.
For small and medium sized businesses, the new Coronavirus Business Interruption Loan Scheme is now available for applications. This scheme will help any viable business with a turnover of up to £45m to access government-backed finance of up to £5 million.
Interest payments and any lender-levied fees for businesses will be covered by the Government for an initial period of up to twelve months.
The government will provide lenders with a guarantee of 80% on each facility. The scheme is available through more than 40 accredited lenders, which are listed on the British Business Bank website.
The Bank of England’s new lending facility for larger firms – the Covid Corporate Financing Facility - will also be open for applications to participate from today morning.
By purchasing short-term corporate debt – known as commercial paper – the scheme provides a quick and cost-effective way to raise working capital for companies who are fundamentally strong but are experiencing severe disruption to cashflows,
The scheme is open to firms that can demonstrate that they were in sound financial health prior to the impact of Coronavirus. Companies who wish to use the scheme do not need to have issued commercial paper before.
A government information campaign has also launched today to ensure businesses are aware of the support available to them and how to access it. In addition to a new central website, the campaign will use media channels including radio, social media and television to reach businesses eligible for help.
NOTE: changes announced 19 May
As announced on 19 May, businesses that wish to draw from the CCFF for a term beyond 19 May 2021 will be expected to commit to showing restraint on the payment of dividends and other capital distributions and on senior pay during the period in which their commercial paper is outstanding.
Businesses that have drawn under the CCFF can now repay their drawings early if they choose to do so.
This support is on top of the Coronavirus Jobs Retention Scheme under which the government will provide a grant to employers to keep their workers on rather than make them redundant. Salaries will be paid at 80% of their current level up to a maximum of £2,500. These grants will be available by the end of April .
Further details about the scheme can be found here.
Bishop Fleming has a team of fundraising specialists ready to advise clients through Coronavirus. As a partner of Capitalise, we have access to 100+ lenders to provide businesses with the opportunity to secure the right kind of funding. Our Capitalise team will support you through all stages of the funding process.