BILS Overhauled Anticipated

Following on from yesterday’s email there have been multiple reports today that the Chancellor is expected to overhaul the Coronavirus Business Interruption Loan Scheme (BILS). We wouldn’t ordinarily comment on speculation but we know that many of you have been frustrated by the BILS process and still need access to funds to continue trading. Hence, we thought it would be useful to share the reports and encourage you to delay your funding decisions (if you can) until further details are announced. The leaked reports suggest that:

  • It will be easier for businesses to access the scheme as banks will no longer have to consider other banking products before they consider BILS, this was previously a mandatory condition of the scheme;
  • Personal Guarantees (PGs) on loans below £250k will be removed;
  • PG’s on loans above £250k will only apply to 20% of the loan as the government is underwriting the remaining 80%;
    Interest rates after the first 12 months are to be kept at a ‘modest’ level.

Businesses will still need to prove that they were creditworthy before the crisis, but the measures above should help improve access to the scheme. We are hopeful the announcement will take place on Friday but as soon as we know more will be in touch to discuss what that means for your business and potentially assist you in applying or re-applying for the scheme where appropriate.

Government Furlough Scheme – Will It Be Ready In Time?

By now, most businesses will have considered their HR options, and many have taken advantage of the Government ‘furlough’ scheme. While the scheme is a positive step, we are slightly concerned about HMRCs ability to deliver the portal in time. HMRC do not have a great track record when it comes to software and with only three weeks to go before it needs to be live we are advising clients to put contingency plans in place if there are unexpected delays. We are hopeful the plans won’t be needed, but we think it is prudent to consider your options now rather than trying to react towards the end of the month if delays are announced.

There are broadly two options:

1. Funding – either via your normal banking facilities or hopefully through the revamped BILS scheme, it might be possible to get a working capital loan or overdraft facility to cover the wage costs until you are reimbursed.

2. HR options – you can potentially agree to defer the payment of staff wages (or a portion of them) until you receive the funds. You are still liable for their wages and staff do not have to agree to the deferral but if you want to explore this route having the conversations as early as possible is advisable. If you need any assistance in this area, please contact the TC HR team.

FCA Proposes Consumer Financial Relief Measures

On a consumer level, the Financial Conduct Authority (FCA) has proposed temporary measures to support end-users of certain products further. Stakeholder consultation is underway with results expected early next week, and implementation planned for 9th April.

The following measures may be expected of banks and other credit providers:

Offer a temporary payment freeze on loans and credit cards for up to three months;
Up to £500 charged at 0% interest for up to three months for existing overdraft customers;
Make sure that all overdraft customers are no worse off on price than before recent changes;
Protect credit rating for consumers using any of these measures.

Christopher Woolard, Interim Chief Executive of the FCA, said: “If confirmed, this package of measures we are proposing today will help provide affected consumers with the temporary financial support they need to help them weather the storm”.

Contact us today to discuss the points raised in this email or any other concerns you have as a business owner, about your personal finances, or, as an employer now on 0330 088 7111.