This new scheme is targeted at small and medium size businesses.
You can apply to borrow between £2,000 and up to 25% of turnover, with a cap of £50,000.
No repayments are due for the first 12 months of loan, and after then interest accrues at 2.5% per year. The standard term of the loan is 60 months, but you can repay early at any time without an early repayment charge.
Crucially this Loan Scheme is 100% backed by the Government (unlike their other Coronavirus loan schemes) which means you do not need to provide a personal guarantee and also that the bank should be quicker and more efficient at issuing the loan. If you have already applied for and / or received a loan of up to £50,000 under one of the existing schemes, you can apply for it to be transferred to this new scheme.
11 lenders are currently authorised to issue loans – RBS, Barclays, Clydesdale and Yorkshire Bank, Danske Bank, HSBC, Lloyds, Natwest, Santander, Starling, Co-operative, Bank of Scotland, TSB and Ulster Bank.
It is recommended that you apply via your normal business bank provider (if they are on the list) and if not, you can approach one of the others. Similarly if you are turned down by a lender, you are free to approach another. You are only blocked from making more than one application at a time. The loan is a one-time only deal – you can’t have two loans.
You can apply for a loan if your business:
- is based in the UK
- was established before 1 March 2020
- has been adversely impacted by the coronavirus
The application process is very straightforward across all of the banks – we have already run through several dummy applications, so that we know what you’ll be faced with! Very minimal information is required, and the whole application takes approx 10-15 minutes.
Please remember we are Accountants You Can Talk To – if you would feel more confident applying with our assistance we are more than happy to book a short telephone call and share your computer screen, so that we can assist you with the application.
Best wishes and continue to stay safe.
Dean and Gina.