Concern about the eligibility of the Falkirk Business Recovery Loan Program
The payback loan program ensures that businesses of any size can continue to access loans and other types of financing up to £ 10million per business once existing COVID-19 loan programs are closed, providing support as businesses recover and grow from the pandemic disruption. and the end of the transition period.
Once received, the funding can be used for any legitimate business purpose, including growth and investment.
The program launches April 6 and is open until December 31, subject to review.
Term loans and overdrafts will be available between £ 25,000-10million per business, while bill and asset finance will be available between £ 1,000-10million per business.
Richard Churchill, an online financial advisory firm partner Blick Rothenberg, said: “The Chancellor announced in his budget that the new payback loan program will be launched on April 6, but eligibility rules have yet to be announced.
“Current COVID-19 loan programs cease at the end of this month, but businesses remain in the dark about financing options and are extremely concerned about their cash flow situation.
“If you are a business that needs financing, it is very difficult to know what to do without knowing the rules of the new regime. Apply now or wait? In addition, it appears that banks will be able to set their own criteria.
“With the pandemic impacting businesses for much longer than initially expected, access to additional funding is essential. Businesses face the daunting proposition to seek to prepare their business to begin trading after the lockdown is eased, in addition to starting to pay off loans and deferred tax balances from the first wave of support it provided. 12 months ago. T
“This combination will reduce their cash flow and deplete their cash reserves just to survive to this point. The finer details of the payback loan program have yet to be announced.
“Many businesses will be wary of the fact that banks are allowed to set their own rules. Many will remember the rigorous tests initially deployed by banks for CBIL loans at the start of the pandemic.
“A repeat of the ‘computer says no’ attitude of banks will deny companies access to finance at a critical time as they seek to revive their operations as the lockdown loosens. Businesses need banks to step up and support them in this critical moment.
“Unfortunately, the Chancellor did not learn from the weaknesses of his previous lending programs. He did not extend the repayment terms of the proposed loans to 10 years. He did not give companies the opportunity to take time off. payment or have extended interest-only payment periods.
“It would appear that the Chancellor is simply not in a position to offer borrowers in the CBIL, or those in the payback loan program, the same flexibility that he has already offered to borrowers on the Bounce Back loan.”