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Interruption Loan Scheme

Also see more update version - where are we now

Within the body of our communication yesterday, we mentioned the Business Interruption Loan Scheme and a few of you have already been in touch as to how this is going to work.
 
Although the exact details are still not clear we do know the following:

  • It will be provided by the British Business Bank through participating providers. The terms offered will be more attractive for both businesses and lenders.
  • The lender will receive a government-backed guarantee against the loan which should lead to more positive outcomes for applicants. It is thought that 80% of the loan will be guaranteed by the government.
  • The government will also cover the first 6 months of interest payments, so businesses will benefit from lower initial repayments.
  • The business remains liable for repayments of the capital. The maximum value of a facility provided under the scheme will be £5 million pounds.

Eligibility

  • You need to be a UK based business.
  • Your business turnover should be no more than £41 million per annum.
  • You operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support – see below)
  • Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements. So, if for business reasons you were not able to secure a loan previously, you may find that you are unable to do so now; and
  • Full eligibility criteria will be published shortly.

Eligibility Restrictions
Please note that a limited number of further eligibility restrictions do apply. Almost all business sectors are eligible, however there are a small number of excluded/restricted sectors arising primarily from EU de minimis-State aid rules.

The Process
Finance terms are from three months up to ten years for term loans and asset finance and up to three years for revolving facilities and invoice finance. We are expecting the interest rates to be between 4%-6% above the base rate which now stands at 0.1%.
 
The expectation of a typical loan application to go through will be about 4 weeks for a simple case and 12 weeks for a more complex case and that is why we recommend a multi-track approach i.e. approach one or more participating lenders to discuss your needs.
 
One of those should be your bank and Myers Clark also have access to a panel of lenders via an online platform so we can assist. We hope that actual turnaround times will be quicker than expectations as we are aware that some businesses will not be able to wait that long. Further information on this point is needed urgently to help those in most need.

Delivery of these loans are thought to start as early as next week so please contact us if you need our help at all.

Please call us and speak to your normal relationship director/manager if you would like to discuss any of the above or any other matter.  We are here to help you through these tough times. To access all of our latest advice in one place, please click on the below link. 

Above all - Stay Safe.

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