If your business has been losing money (and let’s face it, lots have), then you will have been casting envious, not to mention frustrated, glances at your counterparts who, while not coining it, have at least been able to access the Coronavirus Business Interruption Loan Scheme (Cbils). Due to EU rules (and even though we’ve left these still apply for this transition year), public money was not allowed to be spent to prop up what were seen as failing businesses.
This particularly affected start-ups, often in the IT sector, where their business strategy involved (perfectly reasonably in the pre-Covid world) fast growth while making losses, with a view to turning a profit as quickly as possible. Now the rules have changed (see links below).
Businesses with fewer than 50 employees and turnover of less than £9M (i.e. a lot of start-ups) had previously been rejected for Cbils, but this new change offers them some hope.
Of course, the banks are the people lending the money, with the security blanket of the government paying 80% of the lenders’ losses if the borrower defaults. Given that some £13BN has been handed to around 57,000 businesses already, that leaves the banks on the book for a lot of money. They are now under pressure from government ministers to offer the loans to firms they had previously rejected.
If your firm has previously been unable to get a loan, perhaps it’s now time to re-apply. The only slight issue we have is that, at the time of writing, the government website doesn’t seem to have been updated to recognise the new change, despite it being announced a few days ago on another government page. If you are unsure of how best to proceed, please do get in touch and I’ll do my best to help.
Julie Downie, Accounts Manager