There has been a fair bit of change around the terms on which these loans were offered. Some of it, I’m pleased to say has seen common sense prevail. That said, the deadline for these loans remains 31st January and there doesn’t look like being a further extension.
What do the changes mean? Let me clarify.
The repayment term for both Bounce Back Loans and Coronavirus Business Interruption Loans has been increased from 5 years to 10 years. Lenders will contact you direct before you start making repayments to give you the options and figures.
This contact should happen automatically. If you do get to the stage of your repayments due to begin and have had no contact from that lender then give them a bell. This should all happen automatically though.
Increasing Bounce Back Loans
- Previously, if you took a bounce back loan you could not apply for again, that has changed
- If you took less than the maximum you were eligible for you can now ‘top up’ that loan
- You can borrow up to £50k or 25% of turnover, whichever is the lower
- You need to apply to the same lender as your original loan
- The increase is added to your original loan, the same 2.5% fixed interest rate applies
If you want a hand with obtaining an increase then get in touch.
- You can apply for up to 25% of turnover
- You can have as many loans with as many lenders as you want, so long as you borrow only up to 25% of turnover
- Individual loans up to £250k cannot have a personal guarantee supporting them. This is per loan, not the total amount of the loans you have, so two £250k loans can be better than one £500k loan
- The Government pays the lender costs and first year interest for you
- Just because you have one loan doesn’t mean you cannot apply for another, either with the same lender or another lender
- Lenders have different policies. Some are happy for you to have loans elsewhere, others aren’t. If you want the finer details then please ask
- You can use these loans to refinance other borrowing
Coronavirus Interruption Loans can be used for property. There are lenders who will lend for property, development and refinance. If you have a property project and are looking for finance then it may be worth exploring CBILS before it disappears forever. Get in touch
The Big Detail
We have seen the expiry date for these loans extend a couple of times. With the news that a vaccine is, thankfully, on the horizon then I am not expecting these schemes to extend again. The caveat here is whether the Chancellor decides to close these schemes at the same time as Furlough, at the moment there are no indications this will happen.
This means that the clock is ticking and any increase in Bounce Back Loans, or Interruption Loans needs to happen in the next few weeks.