More Businesses now Eligible for CBILS & Bounce Back Loans...
The most controversial and difficult to interpret restriction on eligibility for a Coronavirus Business Interruption Loan (CBIL) or Bounce Back Loan (BBL) has been removed.
Businesses more than three years old that were classified as trading in difficulty at the end of last year have, up until now, been excluded from applying under European State Aid rules, the underlying principle being that the loans are there to support businesses that are struggling as a result of the pandemic, and not to prop up businesses that have historic issues with their viability.
A business in difficulty is officially defined as one where accumulated losses exceed more than 50% of the share capital. Up until now, this has ruled out viable businesses where initial trading losses incurred when the business was in its development phase have yet to be recovered, those where one or two difficult years have impaired the balance sheet, and those where capital has gone in as debt rather than equity.
The good news is that this obstacle has now been removed and from 30th July, these businesses will be allowed to apply for CBILS up to £5m. This includes businesses with fewer than 50 employees and less than £9m in revenue.
If you are in need of additional finance, but have been deterred from applying for a Government backed loan on the grounds that you didn't believe you qualified because of past trading, now is the time to get your application in.
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