COVID-19 business support loans: What you need to know about borrowing

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During the COVID-19 pandemic, the government has provided several types of support loans to help businesses cope with the impacts of coronavirus and lockdown. Of these, the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CIBLS) have been the most relevant for farmers and growers.

Like many businesses across the economy, many farmers and growers have utilised such financial support to help manage their immediate cashflow issues. The loans often offer attractive terms and relatively easy access as the objective during the onset of the crisis was to mobilise financial support for the many businesses that needed it fast.

What do I need to be aware of?

While this has provided an important lifeline and an attractive means of finance it is important to remember that the borrower remains 100% liable for the debt. Government guarantees for the loans have been designed to encourage lenders to lend during very uncertain times. However ultimately, as with other commercial loans, it is the borrower that will need to repay the debt.

Be mindful of all the terms and conditions when borrowing loans and remember to carefully read the fine print to ensure you borrow responsibly. While these loans may for some look more attractive compared to other commercial loans, they can have considerably shorter payback periods especially in the cases where no repayments are due in the first 12 months as with the Bounce Back Loan Scheme.

The NFU is urging members to carefully consider the use of these loans and ensure they are the most appropriate means to finance their business. Please do talk to your bank and finance provider if you do have any concerns or face any difficulties.

What guidance is available?

The NFU has published a host of guidance and support to help members navigate through the various support schemes.

Click here for our interactive COVID-19 business support measures flow chart to help you decide. You can also download it as a PDF here.

You can also download detailed briefings for the two most relevant loan schemes:

In addition, the NFU's economics experts produce a regular business briefing providing updates on broader government support for businesses and other financial measures.

You can also visit this page at NFUonline for overall analysis and guidance on coronavirus government support and other financial measures.

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