The UK banking network has been given an active edict from the Government to assist their business clients during this unprecedented period.
To help protect small business customers from the impacts of Covid-19 the main high street banks have set aside specific funding packages to help minimise disruption to business operations over the coming weeks and months.
The support package will vary from bank to bank and has been designed to help clients access additional finance and manage the impact of cash flow challenges or employee absence. The financial support available includes:
- Temporary New or Increased Overdraft Limits – in most cases with NO arrangement fee
- Capital Repayment ‘Holiday’ on existing loans for 3 to 12 months
- New or increased invoice discounting facilities again in most cases without arrangement fee
In most cases the above temporary measures could potentially be arranged by simply calling or emailing your bank manager.
Where greater financial support may be needed details of the new Government backed Coronavirus Business Interruption Loan Scheme (CBILS) are now available – www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
The application process varies slightly from bank to bank but in a nutshell the Government provides additional security to the lender up to 80% of loan value. The business will remain 100% liable for the borrowing however the fact 80% is Government backed will provide the banks with additional comfort on more marginal lending cases.
New loan terms generally between 1 and 6 years with no arrangement or security fees and potentially an initial 12 month Capital Holiday.
This situation is fast moving with daily government statements – for up to date details on any specific government backed scheme go to https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
If you are in any way concerned please do contact the FTA Finance Team (0330 088 1157 or [email protected] ) who will be able to run through the options open to you or alternatively contact your bank manager direct.