The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million. The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.
The Borrower is 100% liable for the debt. Borrowers need to have a borrowing proposal that would have been viable before the COVID-19 outbreak.
- Sole traders and freelancers are eligible if their activity is operated through a business bank account.
- All UK based businesses with a turnover of less than £45m that meet British Business Bank eligibility criteria: –
- Must be for business purposes
- Business must generate 50% of income from trading activity
- Trading in and with the UK
All businesses that apply must:
- Prove that the business would be viable were it not for the pandemic
- Prove that the business has been adversely impacted Coronavirus
- Confirm that the business was not classed as a business in difficulty on 31 December 2019, if the business is borrowing £30,000 or more
Banks, reinsurers, insurers (but insurance brokers are eligible), public-sector bodies, state-funded primary or secondary school are ineligible.
The maximum length of the facility depends on the type of finance you apply for and will be:
- Up to 3 years for overdrafts and invoice finance facilities
- Up to 6 years, for loans and asset finance facilities
There are 50 accredited lenders. Personal guarantees are not required for under £250,000 loans. Borrowers can apply for the loans from any preferred lender. Lenders have their own specific requirements make their own decision on whether to lend the money.