01/04/2020
The latest update from the British Business Bank is here - https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/. This relates to loans of less than £250,000.
The scheme was originally pushed forward by the Chancellor to replace the Enterprise Finance Guarantee Scheme (EFGS). This scheme required the Banks to take all available security (including the family home) and then the Government promise. The only change the Chancellor originally announced was that the family home could not be taken as security but the banks could take personal guarantees (PG).
Where is this leading? Well if a company failed the bank would take all the security and the PG (personal savings, other properties, other assets) before calling on the Government insurance scheme. In other words the scheme secured 80% of the loan for the bank and not for you the business owner.
This position came into a lot of criticism for obvious reasons and now the banks are not allowed to ask for PG's. Good news. I have no idea what has gone on in the background but I will leave that to those of you who like a good conspiracy theory.
The details of the loan are on the attachment.
Given the delays on Government portals for furlough payments it may we'll be worth registering interest with your bank. If only to get in the queue. Whilst it is a loan no interest is charged for a year and there are no loan repayments for a year. It may be that you never need the money in which case you just repay.
