What support is provided by the government under CBILS?
The Government will provide the lender with a partial guarantee (80%) against the outstanding facility balance, subject to an overall cap per lender. Note, the Government guarantee is to the lender only, the borrower will always remain 100% liable for the debt.
We understand that will make an initial claim for recovery against the borrower and will, once its normal recovery procedures have been completed, claim against the Government guarantee.
Related FAQs
You must exercise reasonable care in assessing status and making a status determination, considering what the position would be if the contractor was engaged directly by the end user client instead of via a PSC.
Status is usually determined by looking a number of factors and how they apply to the contractor’s working arrangements. This is a difficult exercise that is usually carried out by employment and tax lawyers and it is full of grey areas. We have a toolkit that can help you navigate this process which Paul will tell you more about at the end of the session.
The key factors used to determine status are:
- Control:
- How much control does the end user client have over the contractor in terms of working arrangements (hours, place of work) and how the work is carried out? Or is the individual contractor able to determine how and when they work and without direct supervision of the end user client?
- Personal service:
- Is the contractor required to perform the services personally without the right to send a substitute? If there is a right to appoint a substitute is this subject to end user client approval?
- Mutuality of obligation:
- Is the end user client obliged to provide the contractor work with a mutual obligation on the contractor to accept that work?
The reality of these unprecedented times is that enforcement of health and safety legislation by the HSE (particularly through the criminal courts) in relation to Covid-19 is an extremely unlikely outcome.
This scheme is specifically aimed at creating jobs for 18-24 year olds who are on Universal Credit and considered most at risk of unemployment because of the economic downturn. The Government has announced that it will pay young people’s wages (equivalent to 100% the National Minimum Wage plus the associated National Insurance contributions and employer minimum automatic enrolment contributions) for up to 6 months, and that this will amount to a grant worth approximately £6,500 per young person.
The jobs that are created must provide a minimum of 25 hours per week and be paid at a minimum of the National Minimum Wage The Chancellor announced that will be no cap on the number of jobs that will be funded under the Kickstart scheme.
The Government expects the use of bespoke contractual documents to implement temporary arrangements relating to your PFI contracts.
With time and resource precious commodities, focus should be given to documenting:
- The key changes to your PFI requirements
- The temporary nature of the measures
- The requirement for best efforts on behalf of the PFI Contractor
- The importance of continued health and safety measures at all times
A number of our clients and networks raised issues in the early stages of the Scheme around the requirement for personal guarantees to access finance under the Scheme. The Scheme has now been updated so that:
- For facilities under £250,000, personal guarantees cannot be taken to support lending under the Scheme.
- For facilities above £250,000, personal guarantees may still be required by a lender but the amount which can be recovered under these guarantees is capped at a maximum of 20% of the outstanding balance of the CBILS facility after taking into account any other recoveries from business assets.