Will agencies benefit from the government’s new payback loan program? – Eye of the real estate industry
A new payback loan program for businesses will see the light of day next month, but businesses, including real estate agencies, still have no idea who will be eligible, according to Blick Rothenberg.
Richard Churchill, partner in the company’s business advisory group, said: “The Chancellor announced in his budget that the new payback loan program will be launched on April 6, but eligibility rules have yet to be announced.
“The current covid loan programs end at the end of this month, but companies remain in the dark about financing options and are extremely concerned about their cash flow situation.
“If you are a business in need of financing, it is very difficult to know what to do without knowing the rules of the new regime. Apply quickly now or wait ?, Additionally, it looks like banks will have the option to set their own criteria.
With the pandemic impacting businesses for much longer than initially expected, access to additional funding is essential.
Churchill continued: “Businesses are faced with the daunting proposition to seek to prepare their business to begin negotiating after the lockdown is eased, in addition to starting to pay off loans and deferred tax balances from the first wave of debt. support measures provided 12 months ago. This combination will reduce their cash flow and deplete their cash reserves just to survive to this point. “
“The finer details of the payback loan program have yet to be announced. Many businesses will be wary of the fact that banks are allowed to set their own rules.
“Many will remember the rigorous tests initially deployed by banks for CBIL loans at the start of the pandemic. A repeat of the “computer says no” attitude of banks will deny businesses access to finance at a critical time, as they seek to revive their operations as the lockdown loosens. Businesses need banks to strengthen and support them at this critical time. “
He added: “Unfortunately, the Chancellor has not learned from the weaknesses of his previous loan programs. He did not extend the repayment terms of the proposed loans to 10 years. It did not give companies the option of taking payment holidays or having extended periods of interest-only payment. It would appear that the Chancellor is simply not in a position to offer CBIL borrowers, or those in the Recovery Loan Scheme, the same flexibility that he has already offered to Bounce Back Loan borrowers.