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More time to apply for a Coronavirus Business Interruption Loan as date extended
Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 24/09/2020

Rishi Sunak, the Chancellor has announced that the deadline to apply for a Coronavirus Business Interruption Loan and a Bounce Back Loan has been extended to the end of November. The series of measures to support businesses during the winter months and then beyond has been called ‘pay as your grow’.


The Government backed business interruption loan schemes were all launched on different dates and as a result had different end dates. The CBILS loans were due to end this month, with the Bounce Back loans closing to new applications at the start of November. Following the application extension more businesses now have the opportunity apply for loans to help them to continue to operate through the difficult period ahead.


The maximum term for CBILS and Bounce Back loans have also been extended from six years to 10 years, those businesses that need to free up cashflow can extend their loan terms to drastically reduce their monthly payments. With the downside being a greater charge in total interest costs.


What is not clear right now is the impact upon CBILS lenders as they try to fulfil new loan applications while also adjusting existing loans to longer terms. Over 20,000 business applied for CBILS between 16 August and 20 September, with only just over 6,000 being accepted. The early stages of the Covid-19 crisis led to operational struggles in the banking sector with many CBILS lenders restricting their loans to existing customers or small geographical areas or industries.

The Chancellor also announced a new business loan scheme would be launched in January.
The hospitality sector had their VAT cut to 5% extended to until March 2021.


Businesses can apply for invoice finance, asset finance or a business loan under the CBILS scheme.

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How to get an interest free business loan before CBILS ends

The Coronavirus Business Interruption Loans Scheme (CBILS) closes to applications at the end of this month. Businesses have just days left to apply for business loans, invoice finance, asset finance and overdrafts that offer 12-months interest free and payment holidays. CBILS lenders will then have until the end of November 2020 to process all CBILS applications.


Data published this morning by HM Treasury shows that a total of £15.45bn to 66,585 businesses was lent under CBILS; an approval rate of 47%. The larger CBILS loan scheme has lent £3.84bn and bounce back loans have totalled £38.02bn of lending to over 1.2 million businesses.

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Last six weeks for business interruption loans

The Coronavirus Business Interruption Loan Scheme (CBILS) comes to an end on 31 September 2020. After this date, businesses affected by the Coronavirus pandemic will no longer be able to access these loans.
Small businesses have already secured £51bn in Government-backed business interruption loans, money used to support weakened cashflows as a result of the Coronavirus pandemic.
Businesses still have time to apply for a Bounce Back Loan or CBILS and can do this directly through one of the lenders registered with the British Business Bank or through a specialist CBILS broker.

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SMEs pushing through loans ahead of the CBILS deadline

SMEs looking for loans of more than £50,000 under the Coronavirus Business Interruption Loans Scheme (CBILS) are now pushing through applications to make sure they can secure their finance before the scheme ends in September. CBILS launched in March 2020 and was one of three Covid-19 business loan schemes announced by the Government to help companies struggling to trade due to the Coronavirus lockdown. The CBILS scheme gave businesses a six-month period within which to secure 12 months’ interest-free finance across business loans, asset finance, invoice finance and business account overdrafts.


Applications for CBILS increased by 3,729 in the last week (up to 26 July), the greatest weekly increase since the end of June. The scheme has faced some criticism as businesses faced delays to get their lending approved and only half of those applying were successful in securing finance. Up to close of business 26 July, more than 57,000 businesses have received £12.7bn in lending through CBILS.


The most successful of the trio of business loans made available under the Government’s Covid-19 scheme is Bounce Back Loans. These loans of up to £50,000 were introduced over a month later and came with 100% backing form the Government. This means while those businesses taking a Bounce Back Loan remain completely responsible for paying it back, the lender can call upon the Government to repay the debt if the firm defaults. So far, Bounce Back Loans have supported over 1.1m businesses with over £33.7bn of loans. On average, four out of five businesses that apply for a Bounce Back Loan are accepted.
The final loans scheme available to businesses is Coronavirus Large Business Interruption Scheme (CLBILS) loans, aimed at the largest businesses that want to borrow up to £200m; £3.1bn has been lent to 457 businesses.
In total, these three schemes have now reached over £49bn of lending to 1.17m UK businesses, an eye-watering amount of business borrowing that was unimaginable before the Coronavirus pandemic. It’s a stark contrast to July 2019, when businesses repaid £2.5bn of debt, the first net repayment since February 2019 and as result reduced the overall growth rate of business lending.

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Business Moneyfacts Awards 2020 winners revealed

The winners of the 2020 Business Moneyfacts Awards were announced yesterday via a digital “social-media event” on Twitter and LinkedIn. All the results are available via @FinanceAwards #BMFAwards. To celebrate the winners of each award, a special, limited edition Business Moneyfacts Awards brochure is being sent to all Business Moneyfacts magazine subscribers and award winners.

Winners in a range of business finance categories included Santander, which won Best Business Current Account Provider, Hampshire Trust Bank for Best Business Fixed Account Provider, Virgin Money was named Best Buy-to-Let Mortgage Provider, Shawbrook Bank triumphed as Best Commercial Mortgage Provider and Hilton-Baird Financial Solutions for Invoice Finance Broker of the Year.

Full details of the winners, including those rated as Highly Commended and Commended, can be found on our Business Moneyfacts Awards 2020 page.

Lee Tillcock, editor of Business Moneyfacts, said: “All the finalists of this year’s Business Moneyfacts Awards have continued to offer value, choice and innovation across the commercial finance sector. A combination of methods helped decide on the final positions, and events of the last few months should in no way deter from the achievements of the past year, with hard work rightly celebrated. The finalists and eventual winners at this year’s awards should be rightly proud of their achievements and have offered a range of products and services that have best supported the sector at a time when its success and growth remains vital.”

 

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