£50K Interest Free Loan for 12 Months

[simes]

Cater Allen seem not to be offering such a loan - yet.

Nothing on their site to suggest, and phone lines offering only emergency related calls.

Have sent an email in asking about the future, will report back.

[jamesbrown]

I thought maybe banks might try "compete" for more business by lowering the rates but I guess not

It sounds like it can be repaid early with no penalties though?

I'm tempted as I will then be able to pay my corporate tax charge and not worry if the next few months continue being a slow job market.

I guess at the end of the day it's helpful to have more money than needed rather than less. Assuming one doesn't overspend and be unable to pay it back..

FWIW, I think you're in a world of hurt if you don't have sufficient funds to cover taxes. This suggests you've been paying dividends ultra vires, for example. Obtaining a loan to pay taxes is a really bad idea and, tbh, it may not even pass the rudimentary checks by the bank. I think normal bank vetting procedures apply (anything else, and they wouldn't have been able to stand it up in time), so there will be the normal sectoral and bank-specific exclusions about the viability of your business and the affordability of your loan. Viability meaning pre-covid though.

[ScottW]

Yes - that's it;

'without early repayment fees' is correct - you don't pay this if you repay within a year, but you do get hit with having to pay interest.

So the Govt spin that this is interest free seems like piss to me.

The chance to make a quick buck looks like it's been knocked on the heid.

Hmmm the official website seems to indicate no early repayment charges? But might be based on waiting a year until paying it back.

"The length of the loan is six years but early repayment is allowed, without early repayment fees."

Bounce Back Loan Scheme (BBLS) - British Business Bank British Business Bank

[jamed]

FWIW, I think you're in a world of hurt if you don't have sufficient funds to cover taxes. This suggests you've been paying dividends ultra vires, for example. Obtaining a loan to pay taxes is a really bad idea and, tbh, it may not even pass the rudimentary checks by the bank. I think normal bank vetting procedures apply (anything else, and they wouldn't have been able to stand it up in time), so there will be the normal sectoral and bank-specific exclusions about the viability of your business and the affordability of your loan. Viability meaning pre-covid though.

That does make sense. I do have the funds, and some more, to pay the tax charge but was wanting to delay paying it as the future is quite uncertain and I'd rather have the cash for more important personal expenses(council tax/apartment services charges/mortgages/utilities etc) if this bad job market continues for a few more months.

[jamesbrown]

That does make sense. I do have the funds, and some more, to pay the tax charge but was wanting to delay paying it as the future is quite uncertain and I'd rather have the cash for more important personal expenses(council tax/apartment services charges/mortgages/utilities etc) if this bad job market continues for a few more months.

Fair enough. I wouldn't give "paying taxes" as the reason for a loan. I'm not sure whether that would be a game over scenario, but it seems like it might be. I guess all I'm saying is that you should avoid using tax money at all costs for other things; it should be put aside as though it weren't your money. I would try UC and all other options before doing that and I would look to VAT first, because you can defer that one.

[ladymuck]

Are you sure it can be repaid early with no penalties?

I went through the HSBC process and it clearly said that I would be liable for interest if repaid within first 12 months.

As far as I can see if you repay it early you pay interest, if you go beyond a year.... you pay interest.

So at no point is this interest free.

Have I misread this ?

Yes you have misread.

No-one ever claimed it was interest free. Early repayments are fee-free, which is entirely different. I'm assuming you've never tried to repay a fixed rate mortgage within the fixed rate period and discovered you have to pay an early exit fee (which is not interest). It's the same principle. Happens with some personal loans too if you try to repay them within the first year (for example) of having them.

The first 12 months' interest payments are covered by HMG and you don't have to start making repayments until Month 13 with the repayments spread over the following 5 years (that's where the 6 year loan comes from before someone wails about repaying over five years). So, pay nothing for 12 months and then repay in full on Day 366 and pay practically nothing.

[ladymuck]

Cater Allen seem not to be offering such a loan - yet.

Nothing on their site to suggest, and phone lines offering only emergency related calls.

Have sent an email in asking about the future, will report back.

That's because they're not an accredited lender

Bounce Back Loan Scheme (BBLS) - Current Accredited Lenders and Partners - British Business Bank British Business Bank

Cater Allen are also not accredited for Cibils so I suspect they will not be offering this loan to their customers so you will have to apply to one of the other lenders.

[ladymuck]

Yes - that's it;

'without early repayment fees' is correct - you don't pay this if you repay within a year, but you do get hit with having to pay interest.

So the Govt spin that this is interest free seems like piss to me.

The chance to make a quick buck looks like it's been knocked on the heid.

Who said this loan is interest free? I think you're misreading the information, not HMG spinning the details.

There is no interest to pay in the first year. That's all. Show me where it has been explicitly said this loan is interest free.

So basically you're pissed off that you can't borrow a ton of cash that you don't actually need because you want to make money off it, which is entirely NOT the point of offering the lending.

[DaveB]

Yes - that's it;

'without early repayment fees' is correct - you don't pay this if you repay within a year, but you do get hit with having to pay interest.

So the Govt spin that this is interest free seems like piss to me.

The chance to make a quick buck looks like it's been knocked on the heid.

Actually the early repayment terms apply for the full term of the loan. Pay it off at any point without fees. You still pay interest between he end of the fort year and the final payment.

FAQs for Small Businesses: Bounce Back Loan Scheme - British Business Bank British Business Bank

[simes]

That's because they're not an accredited lender

Bounce Back Loan Scheme (BBLS) - Current Accredited Lenders and Partners - British Business Bank British Business Bank

Cater Allen are also not accredited for Cibils so I suspect they will not be offering this loan to their customers so you will have to apply to one of the other lenders.

Ah.

Many thanks.