What are the scheme features?
Up to £50,000 loan: Loans will be from £2,000 up to 25% of a business’ turnover or £50,000, whichever is lower.
100% guarantee: The scheme provides the lender with a government-backed, full guarantee (100%) against the outstanding facility balance, both capital and interest. The borrower always remains 100% liable for the debt
Interest rate: The government has set the interest rate for this facility at 2.5% per annum, meaning businesses will all benefit from the same, low rate of interest.
Interest paid by government for 12 months: The government will make a Business Interruption Payment to the lenders to cover the first 12 months of interest payable, so businesses will benefit from no upfront costs.
No principal repayments for first 12 months: Borrowers will not have to begin principal repayments for the first 12 months, thereafter capital will be repaid on a straight-line basis.
No guarantee fee for businesses or lenders to access the scheme
Finance terms: The length of the loan is for six years but early repayment is allowed, without early repayment fees.
No personal guarantees: No personal guarantees are allowed, and no recovery action can be taken over a principal private residence or principal private vehicle.
Are you eligible?
Businesses from all sectors can apply for a facility, however, you must prove to the lender the following: Confirm you are a UK-based business in activity and established by 1 March 2020.Confirm you have been adversely impacted by the Coronavirus.
Confirm you are not currently using a government-backed Coronavirus loan scheme.
Confirm you are not in bankruptcy, liquidation or undergoing debt restructuring.
*For more information please visit British Business Bank*
Share this story