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CBILS and Overdrafts during Lockdown

CBILS and Overdrafts 

All small business owners are watching the Governments reaction to more pressure to relieve the lack of lending under the Coronavirus Business Interruption Loan Scheme.

CBILS help Covid-19
Changes to CBILS – pressure mounts on government

CBILS up to date info on Friday 17/4/20;

  • Coronavirus Business Interruption Loan Scheme (CBILS) helps affected businesses to access bank lending and overdrafts if they need to. For loans up to £5 million, the Government is providing a guarantee for each loan.
  • The first alternative lender to receive accreditation from the British Business Bank is Funding Circle https://www.fundingcircle.com/uk/ who expect to start taking applications in a weeks’ time. In our experience Funding Circle act faster, can be higher interest rates, but they focus on small businesses. Applications with FC usually leave a soft footprint credit check and may be an option if the government doesn’t improve the CBIL scheme.
  • There are expected to be proposals from the financial services industry submitted that would see support for smaller firms delivered via immediate and government guaranteed extensions of up to £25,000 to overdrafts on their business current accounts, the most basic and widespread product that businesses use. Keep an eye on announcements.
  • Pressure from the Government to back 100% of the loans and cover borrower default is continuing, with the caution that continual tweaks to the CBILS will just cause confusion.
  • Large businesses are now included, that’s those with a t/o of over £45m. CLBILS is designed to provide lenders with a government-backed guarantee of 80%, to offer facilities to viable businesses with annual turnover of £45m or more, that have seen their cashflow disrupted as a result of COVID-19. Good news for mid to large companies.
Help for Norwich business - Covid-19
Many businesses are working from home during lockdown and trying to apply for the CBILS

CBILS – The scheme features as of 17/4/20

  • Up to £5m facility – The maximum value of a facility provided under the CBILS scheme will be £5m, available on repayment terms of up to six years.
  • Interest and fees are paid by government for 12 months: The government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
  • Security – For all facilities, where there is sufficient security available, it is likely that the lender will want security in support of a CBILS facility.
  • No personal guarantees for facilities under £250,000
  • Personal guarantees for facilities above £250,000 may be required, and recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.
  • Finance terms are up to six years for term loans and asset finance facilities.
  • For overdrafts and invoice finance facilities, terms will be up to three years.
  • 80% guarantee – The scheme provides the lender (the bank) with a government-backed, guarantee of 80% against the outstanding facility balance, subject to an overall cap. Recoveries are capped at a maximum of 20% of the outstanding balance of the CBILS facility, after the proceeds of business assets have been applied.
  • No guarantee fee for SMEs to access the scheme: There is no fee payable by smaller businesses to access the scheme. Lenders will pay a small fee to access the scheme.
  • The borrower always remains 100% liable for repayment of the debt.
  • If the lender can offer a loan on normal commercial terms without the need to make use of the scheme, they will do so.
  • Application and processing time is slow as many bank staff are working from home and many big banks are overwhelmed. If you are in a queue or promised a call back, keep calling.

Stay up to date with the daily announcements and the business support in particular  to see if the CBILS access arrangements improve this week – week of April 20th

CBILS stay up to date
Coronavirus Business Interruption Scheme – Not the easiest loan to access

Call if you need us 🙂

 

Covid-19 Job Retention Scheme Grant Claim

CJRS Grant claim
How to make a grant claim for furloughed staff

Dated 8/4/20
HMRC has written to accountants, in relation to the Coronavirus Job Retention Scheme (CJRS), here are the key points;

At this time of national emergency we are standing together with clients and business associates to see this through. Business will get through the Covid-19 outbreak and where you have furloughed staff under the Coronavirus Job Retention Scheme key information has been issued on How To Make Your Grant Claim.
The key points are;

  1. Accountants have a huge reach into the business community and will be instrumental in helping the government ensure employers know what they can do to get ready to make their CJRS grant claim.
  2. Claims should not be made by phone, it will be an online service.
  3. The Coronavirus Job Retention Scheme (CJRS) – Allows employers to claim 80% of the wages of staff (up to a maximum of £2,500 per employee) that they have furloughed (been put on temporary leave).
  4. Businesses, and Agents that are authorised to act on behalf of clients for PAYE matters, will be able to make the claim.
  5. If your accountant has file only PAYE authority you, the business, have to make your own claim. You will need get the information required for the claim from your accountant / payroll provider.  Businesses / their accountant will need the following information on each of the furloughed employees:
    • National Insurance number
    • Salary, National Insurance and pension contribution information that allows business to calculate the claim amount.

Service launch
HMRC are ready to launch on 20 April 2020. This will be made public shortly, at which point we will be contacting businesses to advise them what they need to do. At this point we would welcome you also contacting your clients and offering yourselves as vital support during this process, either directly, if authorised, or indirectly if you are a file only agent.

HMRC are expecting phone demand to be beyond our capacity to offer a normal service so seek help from your accountant to steer you through.

Find out more;
The latest guidance on CJRS can be found on GOV.UK by searching for ‘Coronavirus Job Retention Scheme’. HMRC Guidance CJRS

Grant Claim CJRS

 

 

 

 

 

 

 

 

Covid -19 Small Business Grants Fund and RHLG

Covid-19 Small business grants fund
Grants are being paid out NOW

If you already claim Small Business Rates Relief on your premises

How much funding will be provided to businesses?

Under the Small Business Grant Fund (SBGF) all eligible businesses in England in receipt of either Small Business Rates Relief (SBRR) or Rural Rates Relief (RRR) in the business rates system will be eligible for a lump sum payment of £10,000.

Small Business Grant Fund Eligibility – Businesses with a property that on the 11 March 2020 were eligible for Small Business Rate Relief (SBRR) Scheme (including those with a Rateable Value between £12,000 and £15,000 which receive tapered relief). Businesses which on 11 March 2020 were eligible for relief under the Rural Rate Relief Scheme are also eligible for this scheme.

Eligible recipients will receive one grant per property.

You cannot get SBGF for: • Properties occupied for personal uses, such as private stables and loose boxes, beach huts and moorings. • Car parks and parking spaces.

Businesses which as of the 11 March were in liquidation or were dissolved will not be eligible to claim.

How will the grants be provided?
Central Government will provide funding to Local Authorities that are responsible for business rate billing. Those Local Authorities will contact eligible businesses to arrange payment of the grants. In North Norfolk, Norwich City and Essex these grants are being paid out to eligible businesses now – 8/4/20

If you have not received a letter or e-mail and especially, if you cannot access the office/premises mail, please call your council to get the process started – persevere to get through and the process is swift.

 

On line shops

If you are in receipt of the Expanded Retail Discount

Under the Retail, Hospitality and Leisure Grant (RHLG) eligible businesses in England in receipt of the Expanded Retail Discount (which covers retail, hospitality and leisure) with a rateable value of less than £51,000 will be eligible for a cash grants of £10,000 or £25,000 per property.

Eligible businesses in these sectors with a property that has a rateable value of up to and including £15,000 will receive a grant of £10,000.

Eligible businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 will receive a grant of £25,000

Businesses with a rateable value of £51,000 or over are not eligible for this scheme.

Businesses which are not ratepayers in the business rates system are not included in this scheme.

How will the grants be provided?
Central Government will provide funding to Local Authorities that are responsible for business rate billing. Those Local Authorities will contact eligible businesses to arrange payment of the grants.

Follow the latest and stay up to date with Gov.uk

https://www.gov.uk/government/publications/coronavirus-covid-19-business-support-grant-funding-guidance-for-businesses