Any news on possible extension to 3 month loan holiday?

JennyMoneySaver

We own a pub and despite having a thriving business with minimal debt Corona has hit us hard.  The mortgage and loan holidays / breaks have been a life line and the fact that the mortgage holiday has been extended to 6 months is a huge relief as it will take us a few  months to get back on our feet even if pubs do open on 4th July (which I think is optimistic).
Does anyone know whether the loan holiday scheme is likely to be extended for another 3 months?  This would make such a difference to us.

[Deleted User]

There is/was no "loan holiday scheme" as such, just as the mortgage holidays were not a scheme, but an informal agreement between the government and the banks. In terms of the agreements that have been taken the banks have agreed the mortgage holiday extension, however it is in their interest to do so as if there were mass repossessions it would push down the value of the assets they were claiming as well as cause a lot of bad publicity. In terms of loans they have said that there will not be any blanket extensions, but that individuals can negotiate on a case by case basis, it seems the banks are likely to ask for something, probably enough of a payment to cover the interest on the debt, but not much more.

You say that you have minimal debt, but that you also want a loan repayment holiday, does that add up? Is your pub operated as a sole trader, a partnership, a limited company and are you claiming furlough or SEISS? On top of that if the business has other debts (unsure as you say minimal debt but then mention a need to stop loan repayments) then taking out a Bounce Back Loan, repaying the debts and being on zero interest for the next twelve months and a low rate after that may be a better option.

On a side note I really hope pubs reopen on or before 4th July!

Grumpy_chap

I assume the OP has taken advantage of the Small Business Grant Fund and / or Retail, Hospitality and Leisure Grant Fund.
Also, VAT / Tax payment deferrals.
And CJRS for the staff costs.
BBLS / CBILS might be lower cost borrowing than mortgage / loan payment holiday.

JennyMoneySaver

Thanks @MadMattUK really helpful.  I'll speak to the bank directly.  We are a limited company and don't have a lot of debt against the business but do have personal debt.  The holiday is allow us to cover bills and food until we know we can take a salary from the pub again as we couldn't furlough my husband.  
The govt grant has gone on paying rent to the brewery and we are trying to minimise outgoings as much as possible until we see what level of custom will return and what guidelines we will be working to - the building is 16th Century with small rooms so a 2m distance will kill us.  So many unknowns.  It may be we could then overpay on the loans to get us back on track.

Thanks so much for your advice, really useful.

[Deleted User]

@JennyMoneySaver
I think you should really look at a Bounce Back Loan for the business then, as it would allow you to clear the debts the business does have and change that to having no cost for the next twelve months. It is up to 25% of turnover so hopefully should be able to cover you.

Also have you spoken to the brewery about the rent, I know two pub landlords and both have had their rent waived (not a payment holiday, but waved entirely) for the period of government enforced closure, as well as the brewery crediting them for all beer in the cellar at the point they closed (one is a Fuller's pub, their cancelling of rent has been in national newspapers, the other is a smaller brewery chain but covered by an NDA).

I don't work in the hospitality industry, but do a lot of work for an industry where social distancing at two meters means nothing will happen, I think it looks certain to be cut to 1m and there even seems to be heading towards tacit agreement that if people choose to, they can ignore social distancing and do what works. My view with returning to pubs would be that those going know the risks and are adults so they can make their own decisions, I think the vast majority will be returning to pubs and bars once allowed, but with this lovely weather I hope you have a beer garden as if you do I think it will be very profitable!