Coronavirus Furlough Rules as of

2 April 

1. Furloughed members of staff must not work for the employer during the period of furlough

2. The maximum grant will be calculated per employee and is the lower of:
• 80% of ‘an employee's regular wage’ and.
• £2,500 per month.
PLUS the associated employers’ national insurance contributions (NIC) on this amount and the minimum automatic enrolment employer pension contributions on that wage. 

This gives a maximum cap of £2,500 +£245 (employers’ NIC) + £59 (auto- enrolled pension contribution) = £2,804 of total possible grant that can be applied for per employee per month.

3. Furlough is from 1 March 2020, so is to be backdated. It will last for at least 3 months and will be extended if necessary.

4. The scheme is available for employees on the payroll at 28 February 2020

5. All UK businesses are eligible, 'any employer in the country, small or large, charitable or non-profit' to use the Chancellor's words.

6. The scheme pays a grant (not a loan) to the employer

7. The grant will be paid to the employer through a new online system which is being built for this purpose.

 

There is no detail about the application process at the moment.

8. The employer will pay the employee through payroll, and report payments to HMRC using the Real Time Information (RTI) system as usual, as required by the employment contract.

This contract may be re-negotiated, but that is a matter for employment law.

9.  You may be able work elsewhere (e.g. care working) while on furlough. There's nothing in the furlough rules which stops you from taking a job elsewhere if you're placed on furlough by an employer (doing so wouldn't affect your furlough pay either). But your employment contract may not allow it, so check.

10. The scheme will be administered by HMRC.

Relevant employees must be designated as furloughed employees.
Employers will submit claims to HMRC through a new online portal.

Online Portal is expected to be in place by the end of April 2020. 

Government Guidance for Employers 

Government Guidance for Employees

SMALL BUSINESS GUIDANCE

Very Small Businesses 

 

For ALL businesses that pay no or little business rates (SBBR) there are two finance support packages available.

 

1. A one off grant of £10,000. This is a cash grant and does not have to be repaid. The money is now with local councils and has started to be distributed. Money Mum would like to hear from anyone who has received one of these grants. Please email kate@themoneymum.org 

 

2. Business Interruption Loan. The British Business Bank will support loans of up to £5million.  You will be able to access it through your banks’ lending facilities such as loans and overdrafts. The first twelve months will be interest free as it will be paid by the government. Further details of bank lending criteria are in full below 

Small Businesses in the retail, hospitality and leisure industry 

 

For businesses that pay business rates between £15,000 and £51,000 three finance support packages are available.

 

1. Business rates retail holiday for 2020 – 2021 tax year. 

 

2. A one off grant of £25,000. This is a cash grant and does not have to be repaid. It is likely to be paid through your local authority – you may not have to apply. Funding will start in early April.

3. Business Interruption Loan. The British Business Bank will support loans of up to £5million.  You will be able to access it through your banks’ lending facilities such as loans and overdrafts. The first twelve months will be interest free as it will be paid by the government. 

CORONAVIRUS BUSINESS INTERRUPTION LOAN

  • The scheme launches with 40 lenders and offers loansasset financeinvoice finance and overdrafts.

  • Loans of up to £25m for a maximum term of six years are available to help businesses struggling with their cashflow.

  • Businesses looking for shorter term finance can also access overdrafts and invoice finance for a maximum of three years through CBILS.

  • Businesses that need to use CBILS will also receive a 12-month interest free holiday, with the government paying their interest charges and any associated fees from the lender. 

  • Any application for CBILS should be made directly with one of the lenders participating in the scheme and not the British Business Bank. 

  • Fishing, aquaculture and agriculture businesses may not qualify for the full interest free and fee levy in the first twelve months. Banks, building societies, insurers and reinsurers, the public sector, state funded schools, trade unions and professional or employer based, religious and political membership organisations are excluded.

Big Title

UPDATE from Chancellor 02 April 

  • Banks will be banned from asking company owners to guarantee loans with their own savings or property when borrowing up to £250,000

  • Applications will not be limited to businesses that have been refused a loan on commercial terms, extending the number who benefit.

  • Larger firms with a turnover of up to £500m will also be eligible for more help - with state-backed loans of up to £25m available to firms with revenues of between £45m-500m.

  • Businesses should be clear that they are liable for the entire debt and the repayments. 

BANKS OFFERING CBILS  

  • Askif offers CBILS loans from £10,000 to £60,000 to businesses that have been trading for a minimum of 12 months.

  • Ask are taking new customers. 

  • Personal guarantees are not required on loans up to £250,000.

  • The interest rate is 15 - 17%

Askif Link

  • RBS are not taking new customers 

  • They are offering loans of between £25,000 & £5million for small and medium sized loans

  • It is not clear of they want personal guarantees or not

  • They are offering standard loan rates on between 8 - 10%

RBS Link

  • Yorkshire Bank are taking new customers but priority is given to existing customers.

  • They are offering loans of between £25,001 & £5million for small and medium sized loans

  • They will NOT ask for capital repayments for the first six months

  • They may ask for personal guarantees or securities

  • Yorkshire Banks standard business loan rates are between 3.5 & 19.75%

Yorkshire Bank Link

  • BCRS are offering loans for businesses based in the West Midlands.

  • They are offering loans of between £10,000 & £150,000 for small and medium sized loans

  • They are offering a CBIL interest rate of 13.75%

BCRS Link

  • Barclays have stated that successful applicant would have to pay no more than 5 per cent for a CBIL.

  • Barclays are taking new customers. 

  • Personal guarantees are not required on loans up to £250,000.

  • Experts have warned, however, that some applications could take weeks or even months to process.

Barclays Link

  • HSBC  loans for existing  customers AND standard CBILs criteria 

  • Personal guarantees are not required on loans up to £250,000.

  • Loans of between £10,000 and £5 million are available.

  • No capital payment for first 12 months (subject to status) 

  • Variable interest rate with option to fix.

HSBC Link

  • Lloyds are offering  loans for existing  customers AND standard CBILs criteria 

  • They may ask for personal guarantees.

  • Loans of between £25,000 and £5 million are available.

  • Variable interest rate with option to fix.

Lloyds Link

  • Metro are offering  loans for existing  customers

  • Loans up to £250,000 will not ask for  a personal guarantee.

  • Loans of between £25,000 and £5 million are available.

  • Offering a 6 month capital repayment holiday

  • Variable interest rates.

Metro Bank Link

  • Santander are offering overdrafts for existing  customers

  • Overdrafts are available of between £500 - £25,000.

  • Overdraft interest rate is 10%.

  • Unfortunately information is thin on the ground

Santander Bank Link

  • Dankse Bank are offering loans to new customers

  • Loans are available of between £25,000 - £5million.

  • You will not have to provide personal security for loans under £250,000

  • Fixed and variable rates available 

Dankse Bank Link

  • Nat West are offering loans to new customers

  • Small business Loans between £1k - £50k.

  • Fixed Rate Loans between £25k - £10million.

  • Variable rate Loans for £25k and over. 

  • Capital repayment holiday for first 12 months. 

  • You will not have to provide personal security for loans under £250,000

NatWest Bank Link

  • Bank of Ireland are offering loans to new customers

  • Variable rate Loans for £25k - £5million. 

  • You will not have to provide personal security for loans under £250,000

Bank of Ireland Link

Which other lenders are in the scheme?

Banks highlighted in Green have dedicated CBILS website pages. On the whole information about interest rates and how to apply are sketchy. Having spoken to a number of banks the first port of call should be your own bank, but be prepared it can take hours to get through. 

ART Business Loans (Midlands only) #

  Open to new customers from 30 March

  Interest Rates not confirmed yet.

Compass Business Finance #

   Supports only  print, packaging or

   engineering companies.    

Newable

Swig Finance

Ulster Bank

 

 

• Business Enterprise Fund

• Calverton finance

• County Finance Group Limited

• CWRT

• DSL Business Finance

• Enterprise Answers

• Finance for Enterprise

• First Enterprise

• Business Finance
• Hitachi Capital (UK) PLC

• Let’s Do Business Group

• Msif

• Metro Bank

• Robert Owen Community Banking

• Secure Trust Bank Commercial Finance

• Ukse

Invoice Finance

ABN-AMRO Commercial Finance *
• Calverton Finance
• Secure Trust Bank Commercial Finance
• Skipton Business Finance

Asset Finance

• Arkle finance limited
Compass Business Finance
• County Finance Group
• Genesis asset finance
• Haydock Finance
• Hitachi Capital (UK) Ltd


 

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