Am I Eligible for a Business Interruption Loan?

Millions of businesses have been affected in some way by the coronavirus and the UK government was quick to respond with a Business Interruption Loan running from March to September 2020, offering loans of up to £5 million, which the bank will cover interest-free for the first 12 months.

Those companies particularly in hard-hit industries such as travel, aviation, events and hospitality are strong candidates, but many other businesses on the high street or those affected have been eager to know the eligibility criteria:

• Minimum two years of trading
• Annual turnover of less than £45 million
• Can demonstrate that your business has been impacted by covid-19
• Will require security/collateral to borrow large amounts

 

What Can The Business Loan Interruption Scheme Be Used For?

• Paying staff
• Paying rent
• Avoid bankruptcy
• Pay off outstanding debt
• Meet contractual obligations
• Licensing
• Legal costs
• Accounting costs
• PR and advertising to overcome covid-19 challenges

 

How Much Can I Borrow Through the Business Loan Interruption Scheme?

You can borrow up to £250,000 through the scheme (unsecured) and can borrow over £250,000 if you have security such as collateral or assets (secured loan) – with a maximum borrowing amount of £5 million.

You cannot borrow against your primary residence, such as your home and the loan duration is up to 6 years.

How Can I Maximise My Chances of Approval?

To maximise your chances of approval and the amount you would like to borrow:

• Have valuable assets (vehicles, inventory, invoices, property)
• Little or minimal debt on your business
• Have a profitable business (demonstrates an ability to pay the loan back)
• Good or fair credit score
• No ongoing debt problems, recent bankruptcy or IVA
• Can demonstrate that your business has been impacted by coronavirus in some way

 

Where Can You Borrow From The Business Loan Interruption?

Almost every bank in the UK has committed to offering business interruption loans and a number of specialist finance companies including Aldermore, Paragon and Starling Bank. Find out more about business interruption loans here.

Every lender will have their own separate criteria, although also some key requirements as part of the business interruption loan scheme.

Some lenders may be able to offer more loans than others (e.g banks)- but if you are a member of a bank or there is a bank that you use for your business accounts, this would be a good starting place.

How Do I Apply?

You can start by applying directly with the bank that you already use or you can approach a specialist or private finance institution – you can see the full list of accredited lenders here.