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The Government has launched a website Financial support for businesses during coronavirus (Covid-19), which has details of various government schemes available UK-wide, including:

Coronavirus Business Interruption Loan Scheme

This scheme is designed to help small and medium-sized businesses to access loans and other kinds of finance up to £5 million.

The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.

Businesses can apply for loans if:

  • they are based in the UK; and
  • have an annual turnover of up to £45 million.

Applicants will need to show that the business:

  • would be viable were it not for the pandemic;
  • has been adversely impacted by the coronavirus.

If the applicant wishes to borrow £30,000 or more, they must also confirm that the business was not classed as a business in difficulty on 31 December 2019.

Further information on the scheme can be found at https://www.gov.uk/guidance/apply-for-the-coronavirus-business-interruption-loan-scheme.

Coronavirus Future Fund

The Future Fund provides government loans to UK-based companies ranging from £125,000 to £5 million, subject to at least equal match funding from private investors.

These convertible loans may be an option for businesses that rely on equity investment and are unable to access other government business support programmes because they are either pre-revenue or pre-profit.

The scheme is open for applications until the end of September 2020.

A business is eligible if:

  • it is UK-incorporated - if the business is part of a corporate group, only the parent company is eligible;
  • it has raised at least £250,000 in equity investment from third-party investors in the last 5 years;
  • none of its shares are traded on a regulated market, multilateral trading facility or other listing venue;
  • it was incorporated on or before 31 December 2019;
  • at least one of the following is true:
  • - half or more employees are UK-based;

    - half or more revenues are from UK sales.

Further details on the Future Fund can be found at https://www.gov.uk/guidance/future-fund.

Coronavirus Bounce Back Loan

This scheme is designed to help small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover.

The maximum loan available is £50,000.

The government guarantees 100% of the loan and there will not be any fees or interest to pay for the first 12 months.

After 12 months the interest rate will be 2.5% a year.

An application for a loan can be made if the business:

  • is based in the UK;
  • was established before 1 March 2020; and
  • has been adversely impacted by the coronavirus.

If the business was classed as a business in difficulty on 31 December 2019, the applicant ill need to confirm that they are complying with certain state aid restrictions.

Further details on the Bounce Back Loan can be found at https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan.

Coronavirus Large Business Interruption Loan Scheme

This scheme is designed to help medium and large sized businesses to access loans and other kinds of finance up to £200 million.

The government guarantees 80% of the finance to the lender.

An application for a loan can be made if the business:

  • is based in the UK;
  • has an annual turnover of over £45 million; and
  • has not received support under the Bank of England's COVID-19 Corporate Financing Facility (CCFF).

Applicants will need to show that the business:

  • would be viable were it not for the pandemic;
  • has been adversely impacted by the coronavirus; and
  • the loan will enable the business to trade out of any short-term to medium-term difficulty resulting from coronavirus.

If borrowing more than £50 million, it will be necessary to agree to restrictions on dividend payments, senior pay and share buy-backs during the period of the loan.

Further information on the scheme can be found at https://www.gov.uk/guidance/apply-for-the-coronavirus-large-business-interruption-loan-scheme.

Sarah Laing is an author for accountingcpd. To see her courses, click here.

  1. Tabarak H
    Posted 06-Sep-2020 at
    The small businesses has received a good support from the government. I think the corporation tax will be raised from 19% to 24% and also capital gains tax on second property.
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  2. Julian L
    Posted 31-Jul-2020 at
    The Coronavirus loans are an excellent source of finance for hard hit businesses during this very difficult time.
    0
  3. Nick R
    Posted 17-Jul-2020 at
    The government has offered a range of support to businesses in this difficult time and our clients have found access to the the bounce back loans relatively easy where applications have been made. That, together with the furlough scheme, has given them the lifeline they needed to whether the storm and prepare to start reading again as we come out o ...
    see more
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  4. Mohan L
    Posted 16-Jul-2020 at
    Government has provided lots of support during this difficult time, will be interesting to see what comes out the Autumn budget.
    0
  5. Khalid R
    Posted 03-Jul-2020 at
    The Coronavirus bounce back loans have been a great initiative by the government and has been a life saver for a lot of small and medium businesses
    1
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