Is your business ready for the end of the government’s coronavirus support schemes?

UPDATED October 28, 2021

Although most of the government support packages designed to help businesses through the coronavirus crisis and lockdown have come to an end, the Chancellor announced an extension to the Recovery Loan Scheme as part of his Autumn Budget statement. 

The Recovery Loan Scheme will now end on Thursday, June 30, 2022.

March saw the end of most schemes, including CBILS, CLBILS, and Bounce Back Loans. September saw the end of the Coronavirus Job Retention Scheme, also known as furlough. 

Here are all the dates you need to keep an eye on over the coming months.

When does the government’s coronavirus support end?

If you have any staff on furlough, or you’re considering a government-backed loan to help your business out of lockdown, here are the dates you need to look out for.

What is the Recovery Loan Scheme?

The Recovery Loan Scheme was introduced on April 6, 2021, to replace the outgoing Bounce Back Loan, CBILS, and CLBILS schemes. 

Loans or finance packages of up to £10 million are available for all eligible businesses, but the actual amount you'll be offered and the terms of lending are down to the individual lenders. If your application is successful, any money you borrow should be used to help your business recover from the pandemic and assist it through the transition period.

As with other types of state support through the pandemic, the government will guarantee 80% of the finance to the lender. Remember, the loans are provided by private lenders - not the government - and, as the borrower, you are always 100% liable for the debt.

You can find a list of accredited lenders on the British Business Bank’s website.

The scheme has been extended until June 30, 2021. For more information, check out the Bionic guide to business finance during coronavirus.

How to apply for a Recovery Loan Scheme Loan

To apply for a loan via the Recovery Loan Scheme, get in touch with our business finance division at Think Business Loans. 

Once we've helped you to find a lender, you'll need to complete a short online application to self-certify that your business is eligible for a loan under the terms of the scheme. For more information, check out our guide to the Recovery Loan Scheme.

When does the furlough scheme end?

The government’s Coronavirus Job Retention Scheme - also known as the furlough scheme - ended on September 30, 2021, to help assist the government's roadmap out of lockdown. 

The scheme was extended several times as the UK has been in and out of lockdown, but it has now been closed for good.

It was introduced to help avoid a redundancy crisis across the UK - the concern being that those businesses who had to stop trading or work at a reduced capacity during lockdown would have to release staff as they could no longer afford to pay their wages. 

It paid 80% of each employees’ wages, up to a maximum of £2,500 per month, but businesses needed to contribute 10% of an employee’s wages from July, and 20% from August. It became known as the ‘furlough scheme’ as the main eligibility criteria was that employers needed to classify employees as furloughed, meaning they remain on the payroll but can’t do any work during this time.

In a bid to help get staff back to work, the terms of the scheme changed from August 1, when furloughed workers were able to return to work part-time with employers being asked to pay a percentage towards the salaries of these furloughed staff. 

How much money has been spent on the Coronavirus Job Retention Scheme?

As of August 14, 2021, the overall cost of the United Kingdom's job retention scheme was £68.5 billion. 

In May 2020, during the peak of the Covid-19 crisis, around 9 million people were being supported by the scheme. Numbers began to drop steadily after that and there were 1.6 million people on furlough by the end of July 2021. 

When time was finally called on furlough at the end of September, there were almost a million people still on the scheme, according to research by the Resolution Foundation. Overall, it helped to pay the wages of 11.6 million workers.

What happens when furlough ends?

In theory, once the Coronavirus Job Retention Scheme ends, all employees should return to work on the same contract as before they were furloughed. 

If any employees are made redundant, and they're entitled to redundancy pay, this must be calculated on pre-furlough wages, not the 80%, 70% or 60% of their salary they were claiming when they lost their job. Furlough money can't be used to subsidise any redundancy packages, and if you're made redundant while on furlough because your firm has gone bust, you can apply for payments from the Insolvency Service. To find out more, check out the government guide to furlough and redundancy.

What if I'm self-employed?

If you're self-employed, the Self-Employed Income Support Scheme works in a similar way to the Coronavirus Job Retention Scheme as it provides up to 80% of three months’ average trading profits, capped at £7,500. Payments are made in a single installment, the next of which will be available in April, with a final installment available in July.

More people will benefit from support than before, as it's now open to anyone who became self-employed in the years 2019-2020. This is expected to aid over 600,000 more self-employed workers.

When does CBILS end?

The Coronavirus Business Interruption Loan Scheme (CBILS) ended on March 31, 2021.  It was replaced by the Recovery Loan Scheme on April 6, 2021, which will be available for loans between £25,000 to £10 million.

How much money has been spent on the Coronavirus Business Interruption Loan Scheme (CBILS)?

CBILS offered eligible businesses the opportunity to borrow from £50,001 to £250,000. As of May 31, 2021, there had been 251,342 CBILS applications, 109,877 of which were approved, at a cost of £26.39 billion.

When does the Coronavirus Large Business Interruption Scheme end?

Introduced to help larger businesses who were ineligible for a CBILS loan, the Coronavirus Large Business Interruption Loan Scheme (CLBILS) ended on March 31, 2021.  It was replaced by the Recovery Loan Scheme on April 6, 2021, which will be available for loans between £25,000 to £10 million.

How much money has been spent on the Coronavirus Large Business Interruption Loan Scheme (CLBILS)?

CLBILS offered eligible businesses the opportunity to access loans and other kinds of finance up to £200 million. As of May 31, 2021, there had been 1,152 applications, 753 of which were approved, at a cost of £5.56 billion.

When does the Bounce Back Loan (BBL) scheme end?

The government’s Bounce Back Loan (BBL) scheme ended on March 31, 2021. It was replaced by the Recovery Loan Scheme on April 6, 2021. 

What is 'Pay-as-you-Grow'?

‘Pay-as-you-Grow’ is an initiative that has been introduced to give businesses more time and greater flexibility to repay Bounce Back Loan. This means repayments can now be extended from six to ten years, which is expected to cut the average monthly repayment in half. Businesses that are struggling can make interest-only payments, while any business in real trouble can apply to defer payments for up to six months. No business taking up ‘Pay-as-you-Grow’ will see their credit rating affected as a result.

How much money has been spent on the Bounce Back Loan scheme?

Businesses could apply for between £2,000 up to 25% of their turnover, up to a maximum of £50,000. As of May 31, 2021, there had been 2,094,858 BBL applications, 1,560,309 of which were approved, at a cost of £47.36 billion. This includes BBLS loans that had been topped up.

When does the Future Fund scheme end?

The Future Fund scheme ended on March 31, 2021.

The scheme was launched in May 2020 to help businesses that are reliant on equity funding and ineligible for other government business support programmes because they are either pre-revenue or pre-profit.

How much money has been spent on the Future Fund scheme?

These government-backed loans offered eligible UK-based companies the opportunity to borrow between £125,000 and £5 million, subject to at least equal match funding from private investors. As of May 31, 2021, there had been 2,206 Future Fund applications, 1,190 of which were approved, at a cost of £1.14 million.

How Bionic can help you find the right business finance

It’s important to choose the financing option that offers the best fit for your business and its unique circumstances, and Bionic’s tech-enabled business finance team can help you find the right solution.

Go to Bionic’s business finance page to find out more about the various finance solutions open to your business, or give the team a call 0800 077 4116 to discuss your options.