According to recent research, many employers may be committing acts of fraud in relation to the Coronavirus Job Retention Scheme.  If you are an employer who has furloughed staff, ensure that you understand and adhere to the rules or you could risk charges and penalties.

As we finally come out of lockdown and restrictions begin to ease, many of us are relieved, if not a little nervous, to have our businesses back open and trading again.

If, before lockdown, you had ordered or were looking to purchase new equipment or commercial properties, all which are subject to VAT liabilities, you may now find that you have a funding gap for the VAT.

This is a general term that refers to short-term finance in relation to the purchase or refurbishment of property. It enables you to move quickly to secure desirable properties and, whilst it is more expensive than traditional forms of property finance, it gives you the ability to exploit property transactions at short notice. These types of loans are typically available up to 65% of the 90 day value of the property, with interest rates ranging from 75% per month to 3% per month. With fees of 2% on entry of the loan and 1% on exit of the loan. It will be prudent to point out with bridging facilities an exit strategy is always required to be in place at the outset. Terms range from 3-18 months

Property development finance is a flexible way of financing the development of commercial and residential properties for onward sale to third parties or heavy refurbishment of existing properties. Typically, a deal can be financed if the business can inject the funds to purchase the land, with finance available up to 85% of overall costs -normally capped out at 65-75% of Gross Development Value (GDV).

This refers to property ownership for anything other than self-occupation. This enables you to build a comprehensive property portfolio to, for example, save for retirement or provide ongoing income for your family. Typically, finance is available up to 80% of the property value with interest-only options available, and lenders tend to look for a minimum 125% coverage of the repayments by rent at a stressed base rate of 3.5%.

Commercial mortgages are available to a wide variety of businesses, from sole traders to limited companies. They are a very versatile method of raising funds for property purchase, property refurbishment and capital restructuring.The lending criteria will be based on the ability of the business to service the loan repayments, which is aligned to the profitability and cash flow of the company. Ideally, most banks and Finance Houses will look for a two times services coverage of the loan repayment, but in certain circumstances this can be relaxed. 

What you need to know about the Bounce Back Loan Scheme (BBLS)

From today, small businesses that have been adversely impacted by the Covid-19 outbreak can apply to the Bounce Back Loan Scheme. Businesses can apply for loans between £2,000 and £50,000 for a fixed term of 6 years. The maximum you can borrow is up to 25% of your business’ turnover in 2019.