The government announced yesterday a new type of loan that is 100% guaranteed by the state.
The initial details suggest that you can borrow between £2,000 and £50,000 with no fees or interest for the first 12 months with no repayment for the first 12 months and a loan term of up to 6 years.
This new scheme is a follow up to the criticism over the Coronavirus Business Interruption Loan (CBIL) where banks were slow to respond and the take up was low as detailed information was needed based on ‘normal’ lending requirements.
More details of the new loan will be available from Monday 4 May 2020.
Very few details have been released but what we know so far is that to be eligible for this new loan you must be:
1. Based in the UK
2. Have been negatively impacted by the coronavirus
3. Were not in ‘difficulty’ on 31 December 2019
You cannot apply for this new loan if your business is receiving state funding, a public body or are already in receipt of the Coronavirus Business Interruption Loan.
It is not available to GP practices as these are excluded as a public body however individual GPs of a practice may be eligible if they have say self-employment income or a separate limited company.
If you have already applied for a CBIL of up to £50,000 it appears you can transfer this into the Bounce Back Loan Scheme provided you meet the criteria set above. This can be done up to 4 November 2020.
The new loan arrangement may provide an avenue for some clients, should the need arise, to access funding in order to avoid expensive overdrafts and detailed requirements of the CBIL scheme.
Once further details have been announced on Monday we will provide an update.
At this point it may be worth summarising what assistance is available under the current lockdown.
1. Coronavirus Job Retention Scheme – this allows furloughing of staff. HMRC will pay 80% of their wages up to a maximum of £2,500.
If you have not furloughed any staff in April you can for May and June, if needed. Just contact firstname.lastname@example.org for more information.
This does not appear to be available for GP Practices who have continued to receive NHS income but we understand the NHS are seeking further guidance from the Government in relation to this.
2. VAT Deferral - If you undertake say medicolegal work and are VAT registered then any VAT payment due between 20 March and 30 June 2020 can if required be deferred until 31 March 2021.
3. Tax Payments Due 31 July 2020 – you can defer your 31 July 2020 payment until 31 January 2021 without suffering any interest or penalties.
4. Statutory Sick Pay Rebate – not applicable to many of you but allows if staff members are ill to reclaim statutory sick pay for up to 2 weeks.
5. Self Employed Income Support Scheme - allows 80% of profits up to maximum of £2,500 to be paid for 3 months. Profits should not exceed £50,000 for 2018/19 or on average for last three years and must be more than half of taxable income for the same period as above. Again this may not be applicable to many of you but may be of some use to self-employed secretaries.
6. Coronavirus Business Interruption Scheme - available provided your business was interrupted by coronavirus and the lending proposal is viable.
As a firm we can assist in any of the above.