Government measures in key jurisdictions 2nd edition final pages - Flipbook - Page 100
United Kingdom
Contributor: Farrer & Co
1
Loans and
financial
support
Has the
government put
in place any new
bank funding
schemes?
Anthony Turner | anthony.turner@farrer.co.uk | +44 (0)20 3375 7460
Ian De Freitas | ian.defreitas@farrer.co.uk | +44 (0)20 3375 7471
Lending is available under five new schemes that have been introduced in the UK:
•
he Covid Corporate Financing Facility (CCFF) – this scheme provides funding
T
(through commercial paper being issued by the business and purchased by the
Bank of England) to larger businesses and corporates with investment grade credit
ratings in order to support their liquidity and working capital issues by helping
them to, for example, pay wages and suppliers due to the disruption caused by
COVID-19 to their cashflows. It will initially run for twelve months.
•
The Coronavirus Business Interruption Loan Scheme (CBILS) – this scheme is
designed to support lending to SMEs (businesses with a turnover of no more than
£45 million), that are experiencing lost or deferred revenues, leading to disruptions
in their cashflow. It will initially run for six months.
•
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) – this scheme
is designed to support lending to mid-sized and larger UK businesses with a group
turnover of more than £45 million (the upper limit for CBILS) that are suffering
disruption to their cashflow due to lost or deferred revenues due to the COVID-19
outbreak. It will initially run for six months.
•
Bounce Back Loan Scheme (BBLS) – this scheme was introduced to help provide
financial support to smaller businesses across the UK that are losing revenue and
seeing their cashflow impacted by COVID-19. It aims to assist those businesses
to borrow between £2,000 and up to 25% of a business’ turnover (maximum
£50,000). It will initially run until 4 November 2020.
•
The Future Fund (FF) – this scheme was put in place by the Government for startup businesses as CBILS does not apply to loss making businesses. Under the FF,
the Government will match any investment given to start-up businesses by making
loans which will be convertible into equity if not repaid. Those businesses must
have previously raised £250,000 from private investors in the previous five years.
It will initially run until the end of September 2020.
With the exception of BBLS and FF, these schemes ensure that businesses that were
viable prior to the outbreak of Covid-19 will have access to funding. Those businesses
who were facing financial difficulty prior to the outbreak, will find it more difficult to
get access to this funding.
For more information, see our articles COVID-19 Government help for UK businesses
and COVID-19 Government funding for UK businesses update – further help for smaller
UK businesses
A further £750 million will also be available as loans and grants for small businesses
focussing on research and development.
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Government measures in key jurisdictions
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