COVID-19 Response: Business Interruption Loan Scheme (last updated 23 March 2020)
Originally announced as part of the Budget on 11 March, the Business Interruption Loan Scheme (BILS) was significantly expanded in an announcement on 17 March and further tweaked on 20 March.
The scheme will be delivered by the British Business Bank (BBB) but will be accessible to small and medium-sized businesses via the high street banks and other lending institutions (40 in all). The government will provide these lenders with a guarantee covering 80% of each loan, subject to a per-lender cap on claims, and will not charge businesses or lenders for this guarantee. The scheme will cover loans of up to £5 million in value and is due to open on 23 March 2020 although this may vary by lender. Loans under BISL will effectively be interest-free for the first 12 months (the Government will pay the interest during this period).
To be eligible a business must be UK based with a turnover of no more than £45 million per year. The BBB also has some more detailed criteria, and certain sectors are ineligible or restricted - see the BBB Coronavirus BILS page for details. Please note that at time of writing the criteria have yet to be finalised.
As with any application for funding your business will require to present a business case to the lender, including a written business plan and accompanying financial forecasts. There is likely to be significant demand for funds, and the banks will likely be dealing with a high volume of enquiries regarding existing arrangements (consider asking for payment holidays on existing loans) as well as having reduced staffing, so we would recommend starting work on projections in support of a planned application as soon as possible. We will be happy to help with this.