Scots firms encouraged to tap into government lending

Businesses in Scotland are missing out on a government loan scheme that could help ease cashflow problems due to the pandemic, a finance broker is warning.

ABL Business says many firms are still unaware of the assistance on offer. Picture: John Devlin.

ABL Business said that while it had seen an increase in requests to access the government’s Coronavirus Business Interruption Loan Scheme (CBILS), it was clear from enquiries that a high number of businesses were still unaware of the help on offer.

Obviously, the coronavirus crisis and its associated economic impact has put pressure on organisations and, without sufficient access to cash, they will find trading out of the pandemic extremely difficult.

CBILS is designed for commercial businesses with a turnover above £400,000, allowing them to apply for a variety of financial products — including loans, asset finance, invoice finance, and development, bridging, and commercial mortgages.

Robert Perrier of ABL Business said: “We want to alert relevant organisations that they can access more than just the Bounce Back Loans Scheme, and highlight that CBILS is available for applications until 31 January 2021.

“The benefit of the CBIL Scheme is that it protects business owners, whilst also giving them an option to inject cash flow into the company at an extremely critical time — with the aim to support them in surviving the tough year ahead.”

ABL added that the scheme is enhanced by government guarantees of 80 per cent, with no personal guarantees for directors when borrowing below £250,000. Businesses can still access traditional low-cost funding, with no personal guarantees, for VAT and corporation tax, which may also help to increase cashflow.

Applicants can access financial support in amounts up to 25 per cent of their turnover, with the scheme requiring a minimum loan value of £50,000, and a maximum of £5 million. Multiple CBILS loans can be taken if the full amount borrowed remains within these ranges.

Interest and repayments are also covered in the first 12 months by the UK Government, giving firms the breathing space to recover.

It comes as Scottish firms are being urged to investigate whether they qualify for hefty bonuses through the UK Government’s Research and Development tax credits scheme. Glasgow-based MCC Accountants said such firms could be missing out on millions of pounds in tax rebates.

A message from the Editor:

Thank you for reading this article. We're more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers.

If you haven't already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription.