17th Mar 2021

Government Funding: Everything you need to know

The past year has been hugely difficult for a lot of business owners. Many have had to close their doors, furlough staff or completely stop trading altogether.

If you’re one of those business owners, you may be scratching your head and wondering where exactly you should start to get things moving again.

Whilst we still haven’t found a way to grow money on trees (we wish we had!), we can tell you about some of the current government funding options.

The Government has pulled together several recovery funds and lending options for businesses of varying size and sectors.

What you should be aware of is the application closure date for the two options we’ll explore is 31 March 2021. So if you’re thinking of applying, don’t delay!

We work with a fair number of SME’s – so let’s talk about the options available to those businesses…

The coronavirus business interruption loan scheme (CBILS) – What is it?

The coronavirus business interruption loan scheme provides a loan to SMEs that are losing out on revenue and/or seeing their cashflow interrupted as a result of the pandemic.

CBILS application closure dates have been extended several times, but the 31 March 2021 is the officially closure date. There have been several changes to the scheme’s features and eligibility criteria but ultimately, it’s become more accessible to SMEs across the UK.

CBILS is operated by over 100 accredited lenders from high-street, challenger, asset-based and small lending specialists. A lender can provide up to £5 million in the form of:

  • Fixed term loans
  • Overdrafts
  • Invoice finance
  • Asset finance

What else should I be aware of?

All forms of lending under this scheme are backed by a government guarantee. The Government guarantees 80% of the finance to the lender, paying all interest and any fees for the first 12 months.

Some lenders within this scheme are also offering a 12-month repayment holiday.

The maximum borrowing terms are:

  • Up to 3 years for CBILS overdrafts and invoice finance facilities
  • Up to 6 years for CBILS loans and asset finance

Many of our clients are already using the CBILS for:

  • Covering tax bills or a cashflow gap
  • Investing in stock, machinery or equipment
  • Refinancing or to top-up existing loans at a better rate
  • Building their business, a cash safety net

What’re the other options? The Coronavirus Bounce Back Loan Scheme (BBLS)

What’re the other options? The Coronavirus Bounce Back Loan Scheme (BBLS)

First things first, as we’ve stated above, the application closure date for this Government scheme is also 31 March 2021.

There are 29 lenders operating the BBLS, as with the CBILS, they’re made up of a mixture of banks and lending specialists.

The BBLS helps SMEs borrow between £2,000, and an amount of up to 25% of their overall annual turnover, to a maximum loan amount of £50,000. Got it!?

The Government guarantees 100% of this loan and there are no fees or interest to pay for the first 12 months. After this 12-month period, the interest rate will be 2.5% a year.

What else should I be aware of?

You can’t apply for both the BBLS and CBILS. The bounce back loan may be offered as an additional form of lending by a bank or lender, this would be discussed and clarified at the application stage.

How do I apply?

To make the process even easier for you and your business, we’ve partnered with FCA-regulated Fluidly, to make it even easier for you to explore your options.

Together we’re offering a free, no-obligation funding review!

Find out if you’re eligible and what your options are by using this straightforward tool. Together we’ll help you find tailored funding offers in 30 seconds.