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Feature


Business Banking & Finance


Access to finance:


usinesses have been able to take advantage of a bonanza of grants or


Government-backed loan schemes this year as a result of the Covid-19 pandemic. The good news is that the two


key loan schemes, Bounce Back (BBL) and CBILS have been extended, so businesses can continue to lodge their applications with lenders until the end of November 2020. The terms are highly favourable:


• The Government, through British Business Bank, is paying the first year’s interest and lending fees


• There are no early repayment penalties


• Reduced interest rates are available


• No personal guarantees are required on loans up to £250,000


• In the case of BBL self- certification and a very light touch process is in place to access loans up to £50,000. Although the Government has


initiated these schemes, businesses need to be aware that if they borrow they do remain liable to repay the loan. That means they should think carefully about the profit they would need to generate


42 CHAMBERLINK November 2020


what next? B


to make that possible, as they would with loans under normal circumstances, and ensure they are not storing up trouble for the future. Many smaller businesses, which


have already taken a Bounce Back loan, now face a fresh challenge as a business cannot have a BBL and a CBILS loan at the same time. CBILS loans start at £50,001, but can be used to repay a BBL while increasing the overall amount borrowed.


‘Sadly, we also have a climate that is attracting fraudsters on a significant scale’


There are well over 100


accredited lenders for the two schemes, both national and local and covering specialist areas of lending, whose details can easily be found on British Business Bank’s website: www.british-business- bank.co.uk. These lenders will have one month after applications close, until 31 December, to confirm agreement to the funding and drawdown terms. The not such good news is that


trading conditions due to Covid-19 are likely to remain ‘bumpy’ into 2021.


By Dr Steve Walker (pictured), chief executive, Art Business Loans


Businesses therefore need to be thinking long term.


Looking ahead It now appears certain that a new national guarantee scheme will be established to assist lenders before the end of the year. However, it is anticipated that


there will be a reduction in the Government guarantee limits with it, meaning participating lenders’ terms


are likely to be very less favourable than for the current schemes. Sadly, we also have a climate


that is attracting fraudsters on a significant scale so, looking ahead, I would urge small business owners to be wary. My strong advice would be to seek advice from professionals – such as accountants and brokers - regarding the various alternatives before applying for business finance.


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