Frequently-asked questions about the COVID-19 government-backed support for businesses

Our team has been taking an unprecedented number of calls via our COVID-19 hotline from businesses keen to understand how the government is planning to support businesses through this period of disruption caused by the coronavirus.

We’ve distilled these phone calls into a list of frequently-asked questions (FAQs). These cover:

  • the Coronavirus Business Interruption Loan Scheme (CBILS)
  • government cash grants
  • the Coronavirus Job Retention Scheme
  • support for businesses which are paying sick pay to employees.

FAQs for the Coronavirus Business Interruption Loan Scheme (CBILS)

Yes, but there might be a short lag before the money starts flowing to businesses. Both the CBILS and the Bank of England’s measures will bolster the flow of funding from highstreet banks to businesses. There are of course other funding options aside from the CBILS. We can talk you through what’s on offer from both the public and private sector, and help you make immediate savings.

You’d receive money directly from one of the accredited lenders (there are more than 40). These lenders include high-street banks, challenger banks, asset-based lenders and smaller specialist local lenders. Swoop has well-established contacts across all accredited lenders so registering with us will ensure the best match for your business.

The government has yet to confirm the final details but we know quite a lot already because CBILS is based on the existing Enterprise Finance Guarantee (EFG).

Small and medium-sized businesses that are viable (and have a good track record) but aren’t able to access finance because they have insufficient security to meet the lender’s normal requirements may apply. The borrower always remains 100% liable for the debt.

The CBILS provides the lender with a government-backed guarantee of up to 80% against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’.

To be eligible for a facility under the CBILS, your business must:

  • be UK-based
  • have an annual turnover of no more than £45m
  • have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender – the lender must believe the provision of finance will enable your business to trade out of any short- to medium-term difficulty.

It’s up to the 40+ accredited CBILS lenders to decide on whether your business is eligible. Swoop can help businesses by assessing which of these lenders would be the best fit and matching you accordingly.

CBILS supports a wide range of lending including:

  • term facilities
  • overdrafts
  • invoice finance facilities
  • asset finance facilities.

Yes, the scheme itself went live on 23 March. We’re working with all the main lenders and recommend you register with Swoop now. We can then establish your eligibility and ensure you’re matched with the most appropriate lender.

There are over forty accredited lenders providing the CBIL scheme, and each will have different credit appetites. Just going to the bank may limit your options. Swoop can help you look at the wider market to ensure you find the right match.

No, this is simply a scheme whereby the government guarantees lending through a number of pre-approved or ‘accredited’ lenders. The money made available by these lenders is not additional supply, rather the government is reducing the risk for the lender by providing a guarantee of up to 80% should the borrower default. The guarantee is between the government and the lender. Swoop can match you with the most appropriate lenders participating in the scheme.

You might consider applying for a CBILS facility with this funder or you can approach any other funder in order to take advantage of interest-free lending under the CBILS. If you’re registered with Swoop we can review your existing offer and compare this to other potential CBILS facilities that might suit your needs better or cost you less in the long-run.

A business has to demonstrate it was viable prior to the coronavirus outbreak. Many lenders will want you to demonstrate a level of sustainable profit and/or a level of certainty of future profitability if the outbreak hadn’t occurred. If you’re running at a loss, you might still be eligible. Viability and profitability are not the same thing. If you’re not eligible there are alternative funding options open to you.

Yes, you can. At Swoop we’ll work to establish the best match for your needs. Many of the lenders are dealing with extremely high volumes of applications, so it’s important that we find you the most suitable lenders.

Many lenders use credit scoring in their assessment of loan applications, typically from well-known credit agencies. If you register with Swoop, we can perform a search, which helps us to match your business to potential lenders. This soft search does not affect your business’s ability to raise funding.

We run a soft search on most businesses only to get a feel for which lenders might have an appetite. This soft search does not affect a company’s ability to raise funding. Some of our lenders do however require personal credit checks. There are a number of providers in the market that allow you to check your own credit score without impacting it.

We can make enquiries on your behalf without this information, but to ensure the best match with our providers, and to give us the best chance of a speedy response, we recommend you link accounts at the earliest opportunity. Swoop is FCA regulated and follows strict guidelines on security and confidentiality.

The government introduced some changes to the scheme on 2 April 2020, designed to encourage banks to say ‘yes’ to more businesses applying to borrow under the CBILS. It dropped the requirement for businesses to have “insufficient security”. In other words the scheme can now support lending even where a lender deems a business to have sufficient security for a normal commercial loan. Prior to the change, many borrowers had been told to take high-interest debt when they approached banks for a CBILS facility. Now it’s likely that almost all lending to smaller businesses impacted by coronavirus will be carried out through the scheme – and they can benefit from interest-free lending for 12 months.

Yes, if the lender cannot offer you (or anyone) finance on normal commercial terms, it has an option to make use of CBILS if your companies meet the eligibility criteria.

Finance terms depend on the lender and the type of finance: up to six years for term loans and asset finance facilities, up to three years for overdrafts and invoice finance facilities.

There is no fee for businesses to access the scheme. The government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.

FAQs for the Bounce Bank Loan Scheme (BBLS)

The Bounce Back Loan scheme does not specifically state that you must have an existing business relationship with your chosen lender to get accepted for a loan. However, in our experience, lenders will not offer a bounce back loan unless you bank with them already.

A very small number of banks will consider applications from new clients (whose businesses were established on or before 1 March 2020), so that means opening up an account with them, but applications are only being accepted on a case-by-case basis; not all businesses would be invited to apply.

FAQs for government cash grants

You can find more detailed guidance on eligibility here (published 24 March 2020).

If you have any queries, contact your local authority.

We don’t know this yet. Typically grants take months, but we expect these grants to be administered more quickly as the criteria are very clear. That said, you might want to consider other grants or other speedier sources of funding. See also Swoop’s ten steps to improving your cash flow and working capital immediately.

The government hasn’t shared the precise process yet but we expect it to be a refund or credit for your business rates from your local authority.

FAQs for the Coronavirus Job Retention Scheme

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees who have been furloughed and their earnings, through a new online portal.

As of 25 March, the government is saying: “HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.”

Check here for the latest government guidance.

FAQs for the support for businesses who are paying sick pay to employees

This support is for UK-based small and medium-sized businesses employing fewer than 250 employees as of 28 February 2020.

The eligibility criteria as announced on 24 March by the government are as follows:

  • This refund will cover up to 2 weeks’ SSP for an eligible employee who has been off work because of COVID-19.
  • Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19.
  • Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fitness note – if evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone who has symptoms can get a note from the NHS website.
  • The eligible period for the scheme will commence the day after the regulations come into force on the extension of SSP to those staying at home.
  • The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.

We’ve split our COVID-19 guidance into three main sections below.

A summary of the government-backed support for businesses impacted by coronavirus.

Swoops’s ten steps to improving your cash flow and working capital immediately

Frequently-asked questions about the COVID-19 government-backed support for businesses.

You can call our dedicated COVID-19 finance hotline on
0203 868 0364 between 8am and 6pm, 7 days a week.

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