New Loan Scheme For Small Businesses in the UK
Financial support for small businesses in the UK has been a British government priority throughout the pandemic. This month they added the Stimulus Loan Program to the package, a new loan option for businesses that need help recovering from the effects of Covid-19.
The Stimulus Loan Program replaces the government's current Covid-19 corporate finance program and allows eligible businesses to borrow up to £ 10 million from approved lenders. The program is specifically designed to support companies that have suffered losses or setbacks due to the coronavirus pandemic. The idea of the system is that lenders can offer better terms for their loans, as the borrowed money is secured by a state guarantee.
Who is Eligible?
In order to benefit from the program, you must be able to prove that your company is affected by Covid-19. You will also need to prove to your lender that you have a workable business proposal, that you have passed your credit checks, and that you are currently listed in the UK. Approval of a loan is at the discretion of the lender.
Public sector authorities are not entitled to assistance, nor are schools, banks, construction companies, or government-funded insurers. You are responsible for 100% of the debt so you need to be able to show that you will be able to make repayments.
The program is available to individuals who have borrowed from previous government funding programs such as the Stimulus Loan Program. However, the amount previously borrowed can affect how much you qualify.
What is Available
There are four different types of financing available under the repayment loan program:
· Term loan
· Asset finance
· Financing options for invoices
There is a minimum loan amount of £ 1,000 for investments to finance assets and invoice finance. For overdrafts and term loans this amount is £ 25,000. These funding options are available from a variety of lenders, including alternative commercial finance lenders as well as commercial banks. Every lender must be accredited by the British Business Bank.
Is The Loan Plan Right For Me?
This is to facilitate access to finance and ensure that businesses get the right terms. However, some banks may offer alternative options with better interest rates. Be sure to evaluate the different options and choose the one that gives you the best benefits and the best reimbursement rate. You should also be sure of your repayment schedule before going into debt.
How to Register
To apply for the program, you need to find a suitable lender on the British Business Bank website. Several options are already available, and as it is still very early, we expect more to be announced in the coming weeks. Different lenders may offer different financing options. Hence, you need to consider the various options available and determine which are best for your business.
Once you find a lender you like, you should be able to apply through their website. You can get more information, e.g. B. How much they can lend you and what documents you need to provide.
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