Coronavirus Loan Schemes
Support for your business
During these unprecedented times, businesses up and down the UK are facing significant challenges as they look to grow and recover following the Covid-19 pandemic.
We want to reassure our commercial clients that we are here to help support their businesses whenever possible, and particularly when they need us most.
One of the most important ways for us to do this is to make available debt facilities as supported by the government for UK based businesses.
With the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and Bounce Back Loan Scheme (BBLS) now closed to new applications. We are now accredited with the British Business Bank for the Recovery Loan Scheme (RLS).
Please see below for more details.
Coronavirus business interuption Loan Scheme (CBILS)
The Coronavirus Business Interruption Loan Scheme is now closed to new applications
Please note, applications received by 23.59 on 31 March 2021 can still be processed through to 31 May 2021.
If you have a query about CBILS, or wish to discuss an outstanding application, please contact your banker.
WHAT IS CBILS?
CBILS is a government-backed scheme that provides financial support to viable SMEs that are losing revenue and experiencing cashflow pressures because of the coronavirus. The loans are available for terms of up to six years and include a standard 12-month capital repayment holiday. The first 12 months are interest free as the government pays the interest for you during that time.
The scheme is designed to support businesses that were trading successfully before coronavirus but now face difficulty as a result of the current disruption.
The UK government provides banks with a guarantee for 80% of the loan, but the borrower remains liable for 100% of the outstanding debt.
HOW LONG DO I HAVE TO PAY THE LOAN BACK?
CBILS loans are available for terms of up to six years and include a standard 12-month capital repayment holiday. The interest over the first 12 months is paid by the government, and there is no penalty for early repayment.
CAPITAL REPAYMENT HOLIDAY AND INTEREST-FREE PERIOD
The UK government will pay interest for the first 12 months of the agreement. Also, you don't have to make any capital repayments during the 12-month capital repayment holiday. This means more capital will be outstanding for longer so you'll pay more interest over the full term than if you didn't take the capital repayment holiday. But you can make extra capital repayments which would reduce the overall interest costs over the full term.
WHAT OTHER FORMS OF GOVERNMENT SUPPORT ARE AVAILABLE?
Please see the government support website for details.
coronavirus large business interruption loan scheme (CLBILS)
Supporting bigger businesses through lockdown
The Coronavirus Large Business Interruption Loan Scheme is now closed to new applications
Please note, applications received by 23.59 on 31 March 2021 can still be processed through to 31 May 2021.
If you have a query about CLBILS, or wish to discuss an outstanding application, please contact your banker.
What is CLBILS?
CLBILS is a government-backed scheme that provides financial support to large and mid-sized businesses that are losing revenues or experiencing cashflow pressures because of the coronavirus. Coutts is an accredited provider of the scheme.
The UK government provides banks with a guarantee for 80% of the loan, but the borrower remains liable for 100% of the outstanding debt.
You can find more information at the British Business Bank website.
How much could I borrow?
CLBILS supported loans are available for businesses with turnover over £45 million. The amount of the loan should be based upon your liquidity needs for the next 12 months. The maximum amount we will lend is £50 million.
How long do I have to pay the loan back?
CLBILS loans are available for terms of up to three years and include a 12-month capital repayment holiday. This means you don’t have to pay off any of the loan over the first year, although you do still pay the interest during that period.
More capital will be outstanding for longer, so you'll pay more interest over the full term than if you didn't take the capital repayment holiday. But you can make extra capital repayments to reduce the overall interest costs.
The Bounce Back Loan Scheme (BBLS) is now closed to new applications, including applications for Top-Ups
BBLS applications received by 23.59 on 31 March 2021 should be drawn by the end of April.
If you have a query about BBLS, or wish to discuss an outstanding application, please contact your banker.
What is BBLS?
The Bounce Back Loan Scheme is a government initiative to support small and medium-sized businesses that are losing revenues because of the coronavirus.
The UK government provides banks with a guarantee for 100% of the loan, but the borrower remains liable for all the debt.
How much could I borrow?
We could provide BBLS supported loans for amounts from £2,000 to £50,000 (up to a maximum of 25% of your business turnover).
The amount of the loan should be based on your extra liquidity needs as a direct result of the impact COVID-19 has had on your business.
How long do I have to pay the loan back?
BBLS are available for a fixed, six-year loan term. Interest is fixed at 2.5% for the duration of the loan, with no early repayment fees if you want to pay it off sooner.
A 12-month capital repayment holiday is automatically applied at the start of the loan, but you can choose to make repayments at any time. If you decide to take the capital repayment holiday, it means more capital will be outstanding for longer, so you'll pay more interest over the full term. But you can make extra capital repayments which would reduce the overall interest costs.
The loan interest is paid by the government for the first 12 months, then by you for the remainder of the loan term.
PAY AS YOU GROW
- The Government has announced Pay As You Grow options for Bounce Back Loan borrowers to help businesses get back to regular trading. Pay As You Grow could give you more time and flexibility to pay back your loan.
- Pay As You Grow options will be available to you once you start to repay your Bounce Back Loan, from 12 months after it was first approved.
- Using these options won’t affect your credit score, though it may influence how we assess your creditworthiness in the future and your loan may cost you more overall.
The options available to you when you are due to make your first payment after 12 months are as follows:
1. If you expect to be in a better position to repay in the future:
a) You could reduce your monthly repayments for six months by paying interest only.
• This option is available up to three times during the term of your Bounce Back Loan.
OR:
b) You could take a payment holiday for six months.
• This option is available once during the term of your Bounce Back Loan.
2. If you’re only able to repay a smaller amount:
You could request an extension of your loan term from six years to 10 years at the same interest rate of 2.5%.
If you’re considering this option you should think carefully about your ability to repay over a longer timeframe, taking into account such things as if you intend to cease trading or retire within the revised term of your Bounce Back Loan.
Please note for all three options that the total amount you owe will go up. This is because your interest costs increase as you’re repaying your loan over a longer period.
You can use options 1 and 2 together if you need to.
Important information:
The Bounce Back Loan Scheme is provided through a government scheme and does not benefit from the same level of consumer protection as our other loans. If you are in any doubt about whether this loan is right for you, you should take legal advice.
The Bounce Bank Loan Scheme (BBLS) is Managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). Full details on BBLS and the list of participating lenders can be found on the British Business Bank website: www.british-business-bank.co.uk
Financial institutions
There are no restrictions under the scheme rules relating to financial institutions applying for a bounce back loan. However, ring fenced banks are prohibited from entering into certain types of transactions with financial institutions. Broadly speaking, the term “financial institution” includes investment firms, alternative investment fund managers, structured finance vehicles, credit institutions, certain types of insurance companies, UCITS funds and financial holding companies.
Ring fenced banks include Barclays Bank (UK) PLC, Clydesdale Bank PLC, Virgin Money PLC, HSBC Bank (UK) Limited, Lloyds Bank Plc, Bank of Scotland Plc, National Westminster Bank Plc, Royal Bank of Scotland plc, Coutts & Company, Ulster Bank Ltd, Santander UK Plc and TSB Bank plc.
In line with the requirements of the Bounce Back Loan Scheme, we set out below information in respect of our relationship with you and matters we have agreed to address during the life of your Bounce Back Loan:
- We will monitor your repayment record during the life of your Bounce Back Loan and take action to help you where there are signs of actual or possible repayment difficulties.
- If we identify that you might be vulnerable, we will make appropriate adjustments to ensure that your circumstances are accommodated throughout the duration of your Bounce Back Loan.
- If you default under your Bounce Back Loan, we will give you a reasonable period to remedy any breach and we will not treat the default as an event of default if it is remedied within this period.
- We will not require you to pay any fees of any description (including on default) or any default interest (except if the Bounce Back Loan is not repaid when due we may continue to charge interest at 2.5% per annum until such time as it is repaid).
- We will give consideration to your information needs once you have a Bounce Back Loan with us and provide information to you in a way which is clear, fair and not misleading.
- We will provide you with information on your right to repay a Bounce Back Loan before your Bounce Back Loan is binding on you.
- We will provide you with information on the risks of non-repayment of your Bounce Back Loan, including the impact on your credit file before your Bounce Back Loan is binding on you.
We also agree to provide you with the following information during the life of your Bounce Back Loan:
1. timely, clear and adequate information that will help you to understand that, if you fail to make payments under your Bounce Back Loan, the amount missed, what can be done to remedy, in what timescales, and the impact (if any) on your future repayments;
2. if you default, we will give you information about any proposed action we might take in respect of your Bounce Back Loan, prior to taking such action;
3. regular information about your Bounce Back Loan (on at least an annual basis) in the form of a statement setting out details of the payment transactions on the Bounce Back Loan during the period since such information was provided (or the Initial Drawdown Date, if no such information has been provided previously) and amounts outstanding under the Bounce Back Loan; and
4. information on options available to you for help and assistance, including sources of free independent advice.
Complaints
At Coutts, we ensure we’re always working at the top of our game. But we never rest on our laurels. We know that sometimes we get things wrong.
When we do, we’d like you to tell us so we can put things right and support you better.
Click here to find out how to make a complaint. Click on the drop-down menu and select ‘Coutts complaints handling policy
The Bounce Back Loan Scheme (BBLS) is now closed to new applications, including applications for Top-Ups
BBLS applications received by 23.59 on 31 March 2021 should be drawn by the end of April.
If you have a query about BBLS, or wish to discuss an outstanding application, please contact your banker.
BOUNCE BACK LOAN TOP UP
- If you have borrowed less than 25% of the annual turnover you stated on your original Bounce Back Loan application form, you are eligible to apply for a Top-Up. The combined value of your original loan and Top-up cannot exceed 25% of your originally stated turnover, and is subject to an overall cap of £50,000. You may only apply for a Top-Up once
- The minimum borrowing amount for a Top-Up is £1,000
- An interest rate of 2.5% per annum applies on the Top-Up. This is the same interest rate which applies to your existing Bounce Back Loan
- Government covers the interest on the Top-Up up to the date on which your original interest free period on your existing Bounce Back Loan expires (i.e. 12 months after the initial draw-down of the original loan amount)
- No capital repayments are required up to the date on which your repayment holiday on your existing Bounce Back Loan expires (i.e. 12 months after the initial draw-down of the original loan amount)
- The term of the Top-Up will expire on the same date as the term of your original Bounce Back Loan. Top-up now available subject to eligibility.
PAY AS YOU GROW
- The Government has announced Pay As You Grow options for Bounce Back Loan borrowers to help businesses get back to regular trading. Pay As You Grow could give you more time and flexibility to pay back your loan.
- Pay As You Grow options will be available to you once you start to repay your Bounce Back Loan, from 12 months after it was first approved.
- Using these options won’t affect your credit score, though it may influence how we assess your creditworthiness in the future and your loan may cost you more overall.
The options available to you when you are due to make your first payment after 12 months are as follows:
1. If you expect to be in a better position to repay in the future:
a) You could reduce your monthly repayments for six months by paying interest only.
• This option is available up to three times during the term of your Bounce Back Loan.
OR:
b) You could take a payment holiday for six months.
• This option is available once during the term of your Bounce Back Loan.
2. If you’re only able to repay a smaller amount:
You could request an extension of your loan term from six years to 10 years at the same interest rate of 2.5%.
If you’re considering this option you should think carefully about your ability to repay over a longer timeframe, taking into account such things as if you intend to cease trading or retire within the revised term of your Bounce Back Loan.
Please note for all three options that the total amount you owe will go up. This is because your interest costs increase as you’re repaying your loan over a longer period.
You can use options 1 and 2 together if you need to.
IMPORTANT INFORMATION
The Bounce Back Loan Scheme is provided through a government scheme and does not benefit from the same level of consumer protection as our other loans. Although the Government provide a Guarantee, the borrower remains fully liable for the debt. If you are in any doubt about whether this loan is right for you, you should take legal advice.
The Bounce Bank Loan Scheme (BBLS) is Managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). Full details on BBLS and the list of participating lenders can be found on the British Business Bank website: www.british-business-bank.co.uk
Financial institutions
There are no restrictions under the scheme rules relating to financial institutions applying for a bounce back loan. However, ring fenced banks are prohibited from entering into certain types of transactions with financial institutions. Broadly speaking, the term “financial institution” includes investment firms, alternative investment fund managers, structured finance vehicles, credit institutions, certain types of insurance companies, UCITS funds and financial holding companies.
Ring fenced banks include Barclays Bank (UK) PLC, Clydesdale Bank PLC, Virgin Money PLC, HSBC Bank (UK) Limited, Lloyds Bank Plc, Bank of Scotland Plc, National Westminster Bank Plc, Royal Bank of Scotland plc, Coutts & Company, Ulster Bank Ltd, Santander UK Plc and TSB Bank plc.
In line with the requirements of the Bounce Back Loan Scheme, we set out below information in respect of our relationship with you and matters we have agreed to address during the life of your Bounce Back Loan:
- We will monitor your repayment record during the life of your Bounce Back Loan and take action to help you where there are signs of actual or possible repayment difficulties.
- If we identify that you might be vulnerable, we will make appropriate adjustments to ensure that your circumstances are accommodated throughout the duration of your Bounce Back Loan.
- If you default under your Bounce Back Loan, we will give you a reasonable period to remedy any breach and we will not treat the default as an event of default if it is remedied within this period.
- We will not require you to pay any fees of any description (including on default) or any default interest (except if the Bounce Back Loan is not repaid when due we may continue to charge interest at 2.5% per annum until such time as it is repaid).
- We will give consideration to your information needs once you have a Bounce Back Loan with us and provide information to you in a way which is clear, fair and not misleading.
- We will provide you with information on your right to repay a Bounce Back Loan before your Bounce Back Loan is binding on you.
- We will provide you with information on the risks of non-repayment of your Bounce Back Loan, including the impact on your credit file before your Bounce Back Loan is binding on you.
We also agree to provide you with the following information during the life of your Bounce Back Loan:
1. timely, clear and adequate information that will help you to understand that, if you fail to make payments under your Bounce Back Loan, the amount missed, what can be done to remedy, in what timescales, and the impact (if any) on your future repayments;
2. if you default, we will give you information about any proposed action we might take in respect of your Bounce Back Loan, prior to taking such action;
3. regular information about your Bounce Back Loan (on at least an annual basis) in the form of a statement setting out details of the payment transactions on the Bounce Back Loan during the period since such information was provided (or the Initial Drawdown Date, if no such information has been provided previously) and amounts outstanding under the Bounce Back Loan; and
4. information on options available to you for help and assistance, including sources of free independent advice.
Complaints
At Coutts, we ensure we’re always working at the top of our game. But we never rest on our laurels. We know that sometimes we get things wrong.
When we do, we’d like you to tell us so we can put things right and support you better.
Click here to find out how to make a complaint. Click on the drop-down menu and select ‘Coutts complaints handling policy
RECOVERY LOAN SCHEME (RLS)
THE RECOVERY LOAN SCHEME (RLS) IS NOW CLOSED TO NEW APPLICATIONS
Please note; offers issued on or before 23:59 on 30 June 2022 will be eligible for borrowing under this scheme.
What is the Recovery Loan Scheme?
The Recovery Loan Scheme (RLS) was initially launched on 6 April 2021 and supports access to finance for UK businesses as they recover and grow following the Covid-19 pandemic.
RLS aims to help businesses affected by Covid-19 and can be used for business purposes, including managing cashflow, investment and growth. It is designed to support businesses that can afford to take out additional finance for these purposes.
Businesses who have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme.
The Scheme has now been extended and will run until 30 June 2022, subject to review. In order to be eligible, all offers must be issued by 30 June 2022.
You will have to repay this loan in full.
Scheme features
Up to £2m facility per business: The maximum amount of a facility provided under the scheme is £2m per business (maximum £6m per group). Minimum facility sizes vary, starting at £25,050 for term loans.
Term length: Term loans are available for up to six years.
Interest and fees to be paid by the borrower from the outset: Businesses are required to meet the costs of interest payments and any fees associated with the RLS facility.
Access to multiple Covid-19 schemes: Businesses that have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme although the amount they have borrowed under a previous scheme may in certain circumstances limit the amount they may borrow under RLS.
Personal Guarantees: Not permitted.
Guarantee to the Lender: The scheme provides the lender with a government-backed guarantee against the outstanding balance of the facility. The borrower always remains 100% liable for the debt.
Eligibility Criteria
Covid-19 impact: The borrower must confirm to the lender that it has been impacted by Covid-19.
UK-based: The borrower must be carrying out trading activity in the UK.
Viability test: The lender will consider that the borrower has a viable business proposition but may disregard any concerns over its short-to-medium term business performance due to the uncertainty and impact of Covid-19.
Credit and fraud checks for all applicants: Lenders will be required to undertake credit and fraud checks for all applicants. The checks and approach may vary between lenders.
Turnover limit: To be eligible for and RLS loan your annual turnover must be no more than £45m.
Please note: The following are not eligible under RLS:
- Banks, Building Societies, Insurers and Reinsurers (excluding Insurance Brokers)
- Public sector bodies
- State funded primary and secondary schools
Business Finance Support
The British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cashflow and a list of independent advice services.
Remember that you are responsible for paying back the whole loan.
The Recovery Loan Scheme is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA. Visit the British Business Bank.
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