The Government is intending to close their Coronavirus Business Interruption Loan Scheme (CBILS). The deadline for companies to submit an application is no later than the 31st March.
There are various CBILS products where you can borrow between £5,000 and £5m – subject to the applicant qualifying for the desired loan. (Qualification would include disclosing the company’s turnover on the application.)
The benefits of the scheme are:
- Very low-interest rates
- Reduced payments for the first 12 months on asset finance, no payments for the first 12 months on loans
- No upfront fees
- Terms from 12 months to 6 years
- No personal guarantees required on advances up to £250,000
Payment reductions and moratoriums have proved very popular to those who have applied.
An SME business can borrow up to a maximum of 25% of their 2019 turnover, so even if a company has already taken out a CBILS product, they may still be able to obtain further borrowing.
In one particular case study, a plant hire company was looking to reduce their monthly commitments due to a reduction in income as a result of COVID-19. CEA member SKM Asset Finance Ltd arranged a refinance of some of their existing finance agreements to consolidate them into one new agreement. Taking advantage of the Government’s Business Interruption Payment (BIP), the monthly payment on the new agreement was significantly lower than their existing aggregate payments and the flat rate was less than 2.0% per annum.
With companies keeping a close watch on their cash-flow, they may be unaware of the scheme’s approaching closing date. So it might be wiser to obtain confidential advice and act sooner rather than later.
Written by Steve Moody of SKM Asset Finance Ltd on 01202 855080 or steve@skmassetfinance.co.uk
