Up to £ 10million payback loan scheme to replace CBILS and BBLS

The Recovery Loan Scheme will be open until the end of the year

Rishi Sunak announced the Recovery loan program replace the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme.

UK businesses of any size can apply for a loan or overdraft of between £ 25,000-10million until the end of 2021. Asset and invoice financing between £ 1,000-10million will also be available. All will benefit from an 80 percent government guarantee.

Funding terms can be up to six years for term loans and asset finance facilities. For overdrafts and bill funding, the terms will be up to three years.

No personal collateral will be taken on facilities up to £ 250,000 and as before a borrower’s primary private residence cannot be taken as collateral.

The payback loan program opens April 6 and will run until December 31, subject to review. Like CBILS and Bounce Back loans, these will be available through a network of accredited lenders, whose names will be made public in the near future. The application details will be revealed in the coming weeks.

Once you receive it, the funding can be used for any legitimate business purpose, including growth and investment.

Sunak said: “Even with the new restart grants, some businesses will also need loans to carry them out. As the bounce-back and business interruption loan programs come to an end, we are launching a new trade-in loan program to replace them.

Can I apply for the payback loan program?

If your business is based in the UK, you can apply, but it must:

  • Be viable or would be without the pandemic
  • Have been impacted by the coronavirus pandemic
  • Not be in collective insolvency proceedings – further details will be provided in due course

Banks, real estate companies, insurers and reinsurers (but not insurance brokers); public sector organizations; and
State-funded primary and secondary schools are not eligible.

Can I apply for the payback loan program if I have received CBILS or Bounce Back Loan support?

Yes you can, as long as you meet all other eligibility criteria.

What about the current Covid-19 government loan programs?

The CBILS and Bounce back loan programs will end on March 31, 2021 as previously planned. They were introduced last year to help struggling businesses overcome the difficulties of the early stages of the pandemic.

Small Business has partnered with FundingOptions.com to help you find the right financing for your business. You can find their page here.

In response to the budget announcement, Andrew Sanford, partner at Blick rothenberg said, “Allowing businesses to apply for the new payback loan program until the end of 2021 is good news. However, companies are clamoring for long-term financial support. “

Lenders have previously expressed concerns about delays in establishing program details and their ability to prepare for the launch of the loan program.

The government has also promised additional subsidies for the self-employed, a three-month extension of vacations at professional rates and an extension of the leave scheme until the end of September.

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