David Atkinson, regional director for the East of England at Lloyds Bank Commercial Banking, shares some advice on the financial support available to help businesses deal with the impact of coronavirus (COVID-19).
It’s nearly impossible to accurately gauge what the full economic impact of coronavirus will be, but what’s clear is that firms of every size and sector are already being seriously affected – and small businesses have been among the first to feel the heat.
Over recent days and weeks, we’ve heard many describe this period as an unprecedented time – and that doesn’t seem to me an understatement.
But, in times like this, what’s needed is practical and specific support to help small businesses adapt and adjust. At Lloyds Bank Commercial Banking we’re working with our clients and the Government to provide just that type of support to many of the small businesses affected.
We know from many business owners that it can be a challenge to know what financial help is available as the situation has evolved so quickly. To help, here is a brief guide to the help available and how to access it.
Banks have a vital part to play in supporting SMEs in the East to help them through this choppy period.
We will help our customers through any interruptions they face and as part of our commitment to lend up to £18bn to support businesses this year, we’ve set aside £2bn of arrangement fee free finance to help small firms affected by COVID-19.
It’s support that is available now and has been designed to help businesses manage their cashflow, which might have been affected by supply chain interruptions or employee absences.
It includes arrangement fee free overdrafts and invoice finance facilities, as well as payment holidays on loans for businesses that have been severely affected.
The Coronavirus Business Interruption Loan Scheme
The Chancellor recently announced a new Coronavirus Business Interruption Loan Scheme (CBILS), delivered by the British Business Bank and designed to ensure the continued provision of finance to UK businesses during the outbreak.
CBILS provides facilities of up to £5m for smaller businesses that are experiencing lost or deferred income as a result of coronavirus and cannot otherwise secure finance from their bank.
The scheme gives the lender a government-backed guarantee for the loan repayments to encourage more lending. The borrower remains fully liable for the debt.
Businesses that wish to apply for the scheme can do so through an accredited lender, such as Lloyds Bank Commercial Banking.
As an accredited lender, CBILS enables us to offer SMEs term loans, providing they meet certain eligibility criteria. Interest payments for these loans will be covered by the Government for the first 12 months. Separately, the loan also provides a capital repayment holiday for the first six months of the term.
For more information on Lloyds Bank Commercial Banking’s support for businesses impacted by COVID-19 and how to apply for the Coronavirus Business Interruption Loan Scheme (CBILS) visit: www.lloydsbank.com/business/coronavirus.html
The government has announced a number of other measures to help small businesses through the COVID-19 pandemic. For example, VAT payments can be deferred for three months from March 2020 until June 2020 and, in England, retail, hospitality, leisure and nursery businesses will not have to pay business rates for a year starting from April 2020.
Retail, hospitality and leisure businesses will also be able to apply for a cash grant of up to £25,000 per property. Firms in any sector that are in receipt of small business rate relief or rural rate relief will receive a grant of £10,000.
Visit the UK government’s COVID-19 web page for up to date guidance and more information on the support available to employers and businesses: www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19
Facing the future, together
We will continue to support our customers in the weeks and months ahead. Our network of commercial banking relationship managers are working closely with East of England SMEs to navigate the challenges presented by COVID-19 at a local level.
In these unprecedented times, I am encouraged by the resilience and determination the city’s businesses have always shown in the face of adversity. We will be by their side as they do so again.