United Kingdom•With the exception of BBLS and FF, these schemes ensure that businesses that were viableprior to the outbreak of Covid-19 will have access to funding. Those businesses who werefacing financial difficulty prior to the outbreak, will find it more difficult to get access tothis funding.•For more information, see our articles Covid-19 Government help for UKbusinesses and Covid-19 Government funding for UK businesses update – furtherhelp for smaller UK businesses•A further £750 million will also be available as loans and grants for small businessesfocusing on research and development. This support will be available through InnovateUK’s grants and loan scheme.UPDATES:• Following calls for extensions to each of CBILS, CLBILS, BBLS and the FF (together, theSchemes), in September 2020, as part of the Government’s Winter Economy Plan, theChancellor of the Exchequer announced the extension of the Schemes to 30 November2020 (Extension 1). This was in response to the likelihood of a second national lockdownbeing announced in November 2020 due to a second wave of Covid-19 becoming areality. Those tougher lockdown restrictions would put more UK businesses underpressure without being able to access additional funding to stay afloat.154•Some of the main changes to the Schemes under Extension 1 are summarised as follows:(i) initially loans under CBILS were for a maximum term of six years, but lenders are nowallowed to extend the term to up to ten years. This will reduce the required monthlyrepayments business would need to make after the first twelve months; (ii) CBILS andCLBILS will also benefit from more flexibility on the date of the test of whether or not theirbusiness is an “undertaking in difficulty” is assessed. In order to be eligible for thisscheme, businesses previously had to demonstrate that they were not an “undertaking indifficulty”, a requirement under EU State Aid Law, as of 31 December 2019. The newguidance allows for this assessment to now be determined as at the date of application forCBILS/CLBILS. This flexibility means that businesses can take action to convert their debtto equity in order to qualify for CBILS/CLBILS, giving them the option to restructure theirfinances before applying in order to become eligible; and (iii) in order to offer greaterflexibility, businesses which borrowed under BBLS now have new options to: (a) repaytheir loans over a period of up to ten years; (b) move temporarily to interest-only payments(no repayment of principal) for six months which businesses will be able to do three timesduring the term of the loan; or (c) request a full six-month payment holiday for bothinterest and principle once over the term of the loan, but this is only after the business hasmade six repayments.•In order to help keep businesses affected by Covid-19 afloat during the second nationallockdown (which commenced on 5 November 2020), the Chancellor announced on 2November 2020, that the Government would further extend the Schemes to the end ofJanuary 2021 (Extension 2). Extension 2 was granted in order to give businesses two extramonths from to make loan applications (from 30 November 2020 as above).•The main changes under Extension 2 affected BBLS in that businesses which receivedloans via BBLS will now be able to top-up existing loans if they need extra/additional cash.This top-up will help businesses who have borrowed less than the maximum sum available(up to 25% of their turnover up to a maximum of £50,000) in order to avoid them havingto take on extra debt. As of 10 November 2020, businesses can request top-ups from theirexisting BBLS lender, but they are only allowed to do so once.Government measures in key jurisdictions
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