As predicted yesterday, Rishi Sunak has announced important changes to the Coronavirus Business Interruption Loan Scheme (BILS). Under the old scheme, there were 130,000 applications and only 1,000 were given loans, a clear sign that the scheme wasn’t fit for purpose. The Chancellor has now revised the scheme and The British Business Bank’s official position is that creditworthy businesses previously refused should now re-apply. Contact your TC Partner today to discuss further.
The key changes to the scheme are as predicted last night;
• It will be easier for businesses to access the scheme as banks will no longer have to consider other banking products before they consider BILS, this was previously a mandatory condition of the scheme;
• Personal Guarantees (PGs) on loans below £250k will be removed;
• PG’s on loans above £250k will only apply to 20% of the loan as the Government is underwriting the remaining 80%;
• For customers approaching their existing lenders for a smaller facility, the process may be automated and therefore may not require the same level of documentation, but this will vary from bank to bank
• The banks still have discretion over what interest rate they charge after the first 12 months, but the Chancellor has requested they are kept at ‘modest’ levels.
As a reminder, if you are approaching a new lender you are likely to need the following which we can help you with:
• Management accounts
• Cash flow forecast
• Business plan
• Historic accounts
• Details of assets
There is no harm in speaking to your bank today, but if last week is anything to go by, they might still be digesting the latest guidance so to avoid further confusion it might be better if you use today to ensure you have all of the documents you need and start re-applying on Monday. TC can work alongside you to collate all the necessary documentation for the application.
TC Group can work alongside you to collate all the necessary documentation for the application and is ready to help submit it for you, so contact us on 0330 088 7111 to discuss further.