COVID-19 Financing and Loan Schemes

Coronavirus Bounce Back Loan Scheme

The Bounce Back Loan scheme helps small and medium-sized businesses to borrow between £2,000 and £50,000. The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan. The scheme will be delivered through a network of accredited lenders.

Find out more about the loans and how to access them via the York & North Yorkshire Growth Hub.

Extended Coronavirus Business Interruption Loan Scheme (CBILS)

The Chancellor of the Exchequer announced in April that the government backed loan scheme for large businesses affected by coronavirus has been expanded to cover all viable firms. Now, all viable businesses with turnover of more than £45m will be able to apply for government backed support. This complements existing support including the Covid Corporate Financing Facility and the Coronavirus Business Interruption Loan Scheme. See more details of this announcement here.

The Coronavirus Business Interruption Loan Scheme supports small and medium-sized businesses, with an annual turnover of up to £45m, to access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years.

The scheme will be delivered through commercial lenders, backed by the Government-owned British Business Bank. The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs. The government will also make a Business Interruption Payment to cover the first 12 months of interest payment and any lender-levied fees, so businesses will benefit from no upfront costs and lower initial repayments.

In response to feedback received since the schemes launch, the Chancellor is taking further action by extending the scheme so that all viable small businesses affected by Covid-19, and not just those unable to secure regular commercial financing, will now be eligible. This change is designed to enable all long-term viable businesses experiencing difficulties as a result of the coronavirus outbreak to access finance.

There are 40 accredited lenders able to offer the scheme, including all the major banks.

It's expected that the scheme will run for an initial period of 6 months. There is no limit on the capacity of the scheme.

Information about eligibility and how to access the Coronavirus Business Interruption Loan Scheme can be found here. 

New Coronavirus Large Business Interruption Loan Scheme (CLBILS)

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) will provide a government guarantee of 80% to enable banks to make loans of up to £25m to firms with an annual turnover of between £45m and £500m. This will give banks the confidence to lend to many more businesses which are impacted by coronavirus. Facilities backed by a guarantee under CLBILS will be offered at commercial rates of interest.

The Government will provide lenders with an 80% guarantee on individual loans for businesses that would be otherwise unable to access the finance they need

Lenders will still be expected to conduct their usual credit risk checks, but this scheme allows them to specifically support business that were viable before the COVID-19 outbreak but are facing significant cash flow difficulties, that would otherwise make their business unviable in the short term.

The new scheme will launch later this month and will support a wide range of businesses to access finance products including short term loans, overdrafts, invoice finance and asset finance.

Businesses would remain responsible for repaying any facility they may takeout.

Information about eligibility and how to access the New Coronavirus Large Business Interruption Loan Scheme can be found here.

Support for larger firms through the COVID-19 Corporate Financing Facility

The new Covid-19 Corporate Financing Facility (CCFF) means that the Bank of England will buy short-term debt from larger companies. This will support companies which are fundamentally strong, but have been affected by a short-term funding squeeze. It will also support corporate finance markets overall and ease the supply of credit to all firms. The scheme will be funded by central bank reserves – in line with other Bank of England market operations. It will operate for at least 12 months, and for as long as steps are needed to relieve cash flow pressures on firms that make a material contribution to the UK economy.

Information about eligibility and how to access the Covid-19 Corporate Financing Facility can be found here.