Low interest rates announced for Bounce-Back Loan Scheme (BBLS)
This new scheme announced last week, was the subject of a letter from the Chancellor (1 May 2020) to the accredited lenders who have been instructed to facilitate the scheme since 4 May 2020.
In his letter he said:
In my statement to the House of Commons on Monday I announced the government’s intention to launch a new scheme, the Bounce Back Loans Scheme (BBLS). I am writing to clarify the approach I am taking to a number of matters relevant to the design and operation of BBLS before its launch on Monday.
He followed with the following clarification on pricing:
As a 100% guaranteed loan scheme, the price of BBLS is critical to its success: together, we need to ensure that these loans are affordable and accessible. As such, and incorporating a range of data, I have come to the decision that the rate should be set at 2.5%.
Readers who have been contemplating the value of this scheme to their business will be further encouraged by this announcement on interest rates. 2.5% interest cost together with the government’s 100% guarantee, no interest cost or fees and no loan repayments in the first year, make this an attractive proposition.
However, business owners contemplating this, or any other form of loan funding should undertake a basic risk assessment to ensure this is the most effective way to fund your business during this difficult time.
We can help if you need assistance with preparing cash-flow forecasts or other projections.
Scotland announces lifeline support schemes for businesses
£100m of additional grants for smaller businesses in Scotland was announced last week, 30 April 2020.
In a published news update posted online 30 April 2020, three schemes were announced:
- £34 million Newly Self-Employed Hardship Fund, managed by Local Authorities, will be allocated to the newly self-employed who are ineligible for UK support (as they became self-employed since April 2019) – but are facing hardship – with £2,000 grants
- £20 million Creative, Tourism & Hospitality Enterprises Hardship Fund, managed by the Enterprise Agencies with support from Creative Scotland and VisitScotland for small and micro creative, tourism and hospitality companies not in receipt of business rates relief with grants of up to £25K.
- £45 million Pivotal Enterprise Resilience Fund managed by the Enterprise Agencies providing bespoke grants and wrap around business support to viable but vulnerable SMEs who are vital to the local or national economic foundations of Scotland.
The Scottish Government is also providing £1 million to top up Creative Scotland’s Bridging Bursaries in the not-for-profit sector.
These are welcome additions to the other UK grants on offer to counter COVID-19 disruption in Scotland. Perhaps the Chancellor in London will take note of the Newly Self-Employed Hardship Fund as this is equally relevant to the other sectors of the UK.
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- Are you eligible for local authority grants? - January 25, 2022
- Self-employed tax twisters - January 19, 2022
- Landlords and tax – the basics - January 18, 2022
- More time to file tax returns and pay tax due - January 13, 2022
- Are you registered to use MTD for VAT? - January 11, 2022
- Don\’t forget to declare COVID-19 grants - January 6, 2022
- Will your earnings exceed any of these amounts in 2021-22? - January 5, 2022