Many businesses in the UK are experiencing financial hardship and uncertainty in the face of the COVID-19 epidemic. Through national lockdowns, company operating restrictions, and changes in demand, this is undeniably one of the most challenging times that business owners have endured for many years, if not decades.
In light of the exceptional circumstances, the government has introduced a scheme to encourage lenders to lend, backed by a government-guarantee. A coronavirus business loan is now available through BLG, further bolstering the business support you need.
The scheme is open to smaller British businesses (SMEs) that have an annual turnover of up to £45m. The coronavirus business loan is available for firms that are losing revenue and experiencing a disruption to their cash flow as a result of the epidemic. Your business can self-certify that it is being affected by the COVID-19 epidemic.
Your business must not have been certified as a ‘business in difficulty’ on or before 31st December 2019 to be eligible for a coronavirus business loan under this particular scheme.
Here we take a look at what the government scheme offers SMEs and property developers.
Coronavirus Business Interruption Loan Scheme
Up to £5m is funded by the Coronavirus Business Interruption Loan Scheme (CBILS) over a term of up to two years. The scheme covers lending fees and the first year’s interest, so your business will pay no fees or interest during the first twelve months of the coronavirus business loan.
It is important for businesses to understand that they are fully liable for the debt. Personal Guarantees are still required, but these have a 20% cap on the outstanding balance of the CBILS facility once proceeds from the sale are applied. Furthermore, a Principal Private Residence (PPR) cannot be used as a security to support the personal guarantee.
You must have a viable borrowing development finance proposal for BLG to consider your application for a coronavirus business loan, and you will need to meet other standard lending criteria.
The CBILS programme has been extended by the government a number of times. The current key deadline dates are:
- Loan application to be received by the lender – By end March 2021
- Loan offer accepted by the borrower – By end May 2021
- First draw for development loan – By end August 2021
How BLG Can Help
BLG is a development finance specialist serving SME property developers. Accredited by the British Business Bank, BLG is an approved lender under the Coronavirus Business Interruption Loan Scheme.
You can register your interest for a coronavirus business loan and development finance, which BLG provides through CBILS, with flexible loan structures that support your individual needs and requirements. We are accepting applications from both new and existing customers.
BLG is proud to support UK businesses during the economic uncertainty that the coronavirus has caused. We can help your business navigate through the challenges ahead with a property-secured loan that is part of a government-backed scheme.