£50K Interest Free Loan for 12 Months

[ladymuck]

I'm actually coming around to getting one of these.

The consultancy negotiated 45 day payment terms down from the client's default 90 day but then we were all put on 3 day working weeks due to cash flow concerns. First invoice is due in two weeks and I'm not 100% sure that it will be paid on time - I'm on paid when paid terms. I don't think they're likely to go under but I just don't think paying the bills is their primary focus.

This scheme may actually be helpful in that scenario as I could take the full 25% of turnover, use it like an interest free overdraft and just settle the loan when the invoices are paid. Much cheaper than factoring.

When the scheme launches on Monday I'll have a look and see what the terms are, whether early repayments are allowed, etc. and update the resources sticky.

[elsergiovolador]

I can easily see the unintended consequence of these "Bounce back" loans.

That once people learn about economic citizenship programme of Comoros. You may get a passport if you invest as little as £35k.

For the rest you can buy a beach hut and cover the cost of internet.

People will simply bounce across the world, where there is no IR35.

[Eatapeach]

I'm actually coming around to getting one of these.

The consultancy negotiated 45 day payment terms down from the client's default 90 day but then we were all put on 3 day working weeks due to cash flow concerns. First invoice is due in two weeks and I'm not 100% sure that it will be paid on time - I'm on paid when paid terms. I don't think they're likely to go under but I just don't think paying the bills is their primary focus.

This scheme may actually be helpful in that scenario as I could take the full 25% of turnover, use it like an interest free overdraft and just settle the loan when the invoices are paid. Much cheaper than factoring.

When the scheme launches on Monday I'll have a look and see what the terms are, whether early repayments are allowed, etc. and update the resources sticky.

It will be interesting to see what proof is required. I assume it will be presentation of accounts in some way, we will have to see.

Like others I have a dormant PSC and am through an umbrella for the last 12 months. So if the umbrella furlough part doesn't work itself out, it remains to be seen if I can apply for this or not. Or both.

[simes]

I will be looking into this.

I have a LtdCo owned flat that, had I still been working (Outside etc.) would have been paid off in November. Being currently on a nicely cushioned bench with, smilingly, zero immediate prospects, I am thinking to grab a loan to pay it off and bravely bank on a more forward thinking and capable world to pay later.

The other aspect of this equation is that my lender has decided in its wisdom to no longer be offering Any new deals come end of term. And they decided this just after my signing on the dotted line.

Higher rate SVR or nothing. And Nothing will mean finding a new lender which frankly, I feel exhausted just thinking about it.

[northernladuk]

I will be looking into this.

I have a LtdCo owned flat that, had I still been working (Outside etc.) would have been paid off in November. Being currently on a nicely cushioned bench with, smilingly, zero immediate prospects, I am thinking to grab a loan to pay it off and bravely bank on a more forward thinking and capable world to pay later.

I really can't see why you would use something to help people keep their heads above water to cause you more stress and risk? The flat will pay for itself in time with little to no risk but you are bringing the payment date forward opening the risk of a large loan you possibly can't pay off? Are the benefits really worth that? Not something I'd be doing personally. I get how tempting it is but you've already mention you are exhausted later so why put more problems on your plate?

The other aspect of this equation is that my lender has decided in its wisdom to no longer be offering Any new deals come end of term. And they decided this just after my signing on the dotted line.

Higher rate SVR or nothing. And Nothing will mean finding a new lender which frankly, I feel exhausted just thinking about it.

Speak to Freelancer Financials. My discount period with Birmingham Midshires came to an end and they weren't offering any discount options at all so shot up to 4.5% plus. Had a look around myself but this was a month ago and lenders were pulling the products as fast as I can enquire about them. At least three at sub 2% disappeared while I was looking in to them. Freelancer took it over and got me one within a week.

Let them do the legwork for you, don't have to feel exhausted and get a better rate. Better rate means paid off quicker and don't have to add the risk of the loan?

[jamed]

I will be looking into this.

I have a LtdCo owned flat that, had I still been working (Outside etc.) would have been paid off in November. Being currently on a nicely cushioned bench with, smilingly, zero immediate prospects, I am thinking to grab a loan to pay it off and bravely bank on a more forward thinking and capable world to pay later.

The other aspect of this equation is that my lender has decided in its wisdom to no longer be offering Any new deals come end of term. And they decided this just after my signing on the dotted line.

Higher rate SVR or nothing. And Nothing will mean finding a new lender which frankly, I feel exhausted just thinking about it.

So you didn't end up going down the furlough route?

[d000hg]

Our accountant put out this handy video explanation... again I'd expect many contractors are fairly on the ball but you might know self-employed people or people running tiny businesses who might find it handy and easy to follow:

Abacus Jack Accountancy - COVID-19: Business Bounce Back Loans - 3 min video update

I get the impression a lot of these things you just have to mention Coronavirus to qualify but it IS for those affected not just people wanting a free loan, and you shouldn't take it if you don't have a need for it. If you've been benched and have any kind of papertrail indicating CV is the reason I assume contractors are eligible.

[jamed]

Our accountant put out this handy video explanation... again I'd expect many contractors are fairly on the ball but you might know self-employed people or people running tiny businesses who might find it handy and easy to follow:

Abacus Jack Accountancy - COVID-19: Business Bounce Back Loans - 3 min video update

I get the impression a lot of these things you just have to mention Coronavirus to qualify but it IS for those affected not just people wanting a free loan, and you shouldn't take it if you don't have a need for it. If you've been benched and have any kind of papertrail indicating CV is the reason I assume contractors are eligible.

Or can’t find a new contract because of CV?

[simes]

So you didn't end up going down the furlough route?

Nope.

I revisited with the accountant and he said, not unreasonably, that I had had the opinion from HMRC and if I progressed this now, it would be touching on fraud.

To be frank, while there is money coming in, and while I am doing nothing else to progress any part of my life (random online courses notwithstanding (but that which will also not progress anything realistically productive)), I was just looking to get plugged into Something.

MyLtdCo account will be down £150/month until something happens. It can weather this for now.

Thanks for asking.

[simes]

I really can't see why you would use something to help people keep their heads above water to cause you more stress and risk? The flat will pay for itself in time with little to no risk but you are bringing the payment date forward opening the risk of a large loan you possibly can't pay off? Are the benefits really worth that? Not something I'd be doing personally. I get how tempting it is but you've already mention you are exhausted later so why put more problems on your plate?

Speak to Freelancer Financials. My discount period with Birmingham Midshires came to an end and they weren't offering any discount options at all so shot up to 4.5% plus. Had a look around myself but this was a month ago and lenders were pulling the products as fast as I can enquire about them. At least three at sub 2% disappeared while I was looking in to them. Freelancer took it over and got me one within a week.

Let them do the legwork for you, don't have to feel exhausted and get a better rate. Better rate means paid off quicker and don't have to add the risk of the loan?

I am banking on 20 years without a break coming back to the fore to ward off Those risks.

There will be more exhaustion involved in trying to find a new lender for a part mortgage because I have originally effected a loan for a Ltd Co with a SIC code for IT consultancy. Most lenders need a LtdCo with a property / rental SIC code. I really cannot be (past tense for a rude noun) to get someone to go through all this on my behalf again.

So, current thinking is, free loan, payable later. No headache, no interest, and to be rid of my lender and their (really not forward) thinking.

However, thank you. I have taken down the above lender detail in case the proof of the figgy duff is more headache than otherwise.