I hope everyone is keeping safe and well.
We are edging closer to the Government issuing guidance over the coming weekend on plans for the easing of Lockdown provisions. My expectation is that this will involve a staged easing, with businesses who can continue to operate sufficiently using mainly working from home provisions will be asked to continue to do that, and provisions for businesses to maintain a certain level of social distancing within their staff base. There will be many businesses wanting to understand how their particular business and industry may be affected. The Government will need to spend a lot of time this week going through all of the permutations within different industries and settings to be able to put forward the guidance needed in enough detail to provide sufficient clarity.
In the meantime, business support measures have been in full flow, with some variations and updates being provided. Some key areas are as follows.
Bounce Back Loan Scheme
As outlined in our message last week, the Bounce Back Loan Scheme has been launched, with the scheme open for applications today. We have already helped a number of clients with their submissions under this scheme. As a reminder, this scheme’s headline details are:
• Loans between £2,000 and £50,000, with a limit linked to 25% of a business’s turnover
• 100% guaranteed by the Government, with no Personal Guarantees
• Interest free for the first 12 months
• An interest rate applied to the facility of 2.5% per annum
• No fees
• Lending period of up to six years
• No repayments in the first 12 months
• Funds expected to be received within 24 hours of application.
There are currently a limited number of lenders within the scheme.
So far our experience is that the online application process is straight forward and asks for some core information which should be readily available for businesses. The turnaround time remains to be seen, although as stated above it is purported to be within 24 hours.
In theory, an application could be made to a bank who isn’t the businesses current bank. However, so far it appears the banks online processes arent set up to deal with these scenarios.
Coronavirus Business Interruption Loan Scheme (CBILS)
The CBILS loan scheme has been widely reported previously, and has been running for a period of time now. This covers lends requested above the £50,000, or in excess of the turnover restriction. The process with this loan scheme varies for different banks and for different amounts. The larger banks within the scheme have recently reported jointly that they have been streamlining their processes and information requirements for submissions, which is clearly welcome to speed up applications and turnaround times.
In relation to the loan schemes, forecasts aren’t necessarily needed, which can help speed up the application process. However, all businesses should consider whether forecasts are required for internal assessment purposes even if not needed for loan applications.
Coronavirus Job Retention Scheme
A great many claims have been submitted under the CJRS, and pay-outs have been coming through from HMRC, which is clearly very welcome for the businesses concerned.
There are still reports of clients having difficulties with accessing online accounts due to apparent login detail discrepancies. HMRC have not been overly helpful in dealing with these types of scenarios. The accountancy press has also reported some issues with businesses being incorrectly refused support under CJRS due to tax arrears. HMRC have confirmed this was incorrect on their part, apologised for the issue, and told businesses they should reapply.
Hopefully such difficulties will be ironed out, although the submission process has in the main been relatively straight forward for most, although the claim calculations can be time consuming under certain scenarios.
Self Employed Income Support Scheme
The full finer details in relation to this scheme are still awaited, and so we will issue further information as this is made available. Please see previous updates or contact us if you wish to discuss any initial considerations in relation to this scheme.
Clarke Nicklin Assistance
Please do not hesitate to get in contact with us in relation to any of the above. In particular, we are helping clients consider whih options are most appropriate for them under funding schemes available, and assisting with application processes and forecast preparation both for funding applications, and also so that internal assessments and “what if” scenarios can be considered by clients. We are also helping clients consider who to approach if their bank isn’t in the loan schemes or they feel a different option might be appropriate.
All the best for now.