Brexit insights29 Dec 20
Financial measures to assist businesses
We provide a useful reminder of the financial measures confirmed on 24 September 2020 to help assist businesses.
- Extension to the government’s three coronavirus business interruption loan schemes and the Future Fund. The extension aligns all the end dates of the schemes to 30 November. Note that previously they had different closing dates, with each scheme originally open for applications for a period of six months. Weightmans have been advising a number of funders and investee businesses on these schemes, in particular around security arrangements, guarantees and intercreditor arrangements.
- Further information on the four schemes is available on the British Business Bank website.
- Measures put in place to protect businesses from insolvency have been extended to continue giving some breathing space. The changes to protect businesses from insolvency were introduced in the Corporate Insolvency and Governance Act and were due to expire on 30 September 2020. The temporary measures confirmed to be extended include:
- Statutory demands and winding-up petitions will continue to be restricted until 31 December 2020 to protect companies from aggressive creditor enforcement action as a result of coronavirus-related debts
- Termination clauses are still prohibited, stopping suppliers from ceasing their supply or asking for additional payments while a company is going through a rescue process. However, small suppliers will remain exempted from the obligation to supply until 30 March 2021 so that they can to protect their business if necessary
- Companies and other qualifying bodies with obligations to hold AGMs will continue to have the flexibility to hold these meetings virtually until 30 December 2020
- The modifications to the new moratorium procedure, which relax the entry requirements to it, have been extended until 30 March 2021. A company may enter into a moratorium if they have been subject to an insolvency procedure in the previous 12 months. Measures also ease access for companies subject to a winding up petition. The temporary moratorium rules have been extended to 30 March 2021