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Covid -19 Bounce Back Loan Scheme Live from 4/5/2020

Posted on by Shaper Accountants

Bounce Back Loan Scheme advice for Norwich business

Bounce Back loans will be available for applications from 9am on 4 May 2020.

Up to date as at 2/5/20; Scheme launch date 4/5/20
Under the Bounce Back Loan Scheme (BBLS), the Government announced that the smallest businesses will be able to borrow between £2,000 and £50,000 – capped at 25% of a business’s turnover. The loan will be 100% guaranteed for lenders, by the Government.
The Bounce Back loans are separate to the previously announced Coronavirus Business Interruption Loan Scheme (CBILS), which allows SMEs to apply for a loan of between £50,001 and £5 million, and which is backed by an 80% government guarantee.

Eligibilty for a Bounce Back Loan

  • Sole traders, partnerships and limited companies can apply. If your business meets all the following criteria you may be eligible for a loan:
  • Based in the UK.
  • Business is impacted by Coronavirus / Lockdown
  • Was not classed as an “undertaking in difficulty” as of 31 December 2019. If you don’t know your situation at 31/12/19 ask you accountant to help you or look at your software at that date to see what’s what.
  • Certain companies cannot apply, like banks, insurers and reinsurers (excluding insurance brokers), public sector bodies and state-funded primary and secondary schools.

Help for business - Covid-19

How do I apply for a Bounce Back Loan?

The expected process is;

  • Companies can apply through a short online form.
  • Many banks will provide access via on-line banking for existing customers e.g Barclays Bank have announced this.
  • The online form will contain minimal checks, with no need for a credit check or an investigation to ensure the company is financially viable. There is also no requirement for a business plan.
  • Some fraud checks will still apply.
  • If the application is approved, the funds should be in the company’s account within 24 hours.

What are the Bounce Back Loan terms?

  • Interest-free for the first 12 months, and no repayments due within this period.
  • 100% backed by the government, for the lender.
  • No arrangement fees or early repayment charges.
  • Maximum term of the loan is six years.
  • Interest rate expected to be set at 2.5% p.a.

What if I have already had a CBILS loan approved?

You cannot apply to both the CBILS and the Bounce Back schemes.
If you have a CBILS loan of up to £50,000 you can ask to move it to a Bounce Back Loan.

More details will follow on and after the 4/5/20 and first applications are expected to be made on Monday the 4th

Stay up to date with the Government announcements here;
https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan

If you need advice please get in touch and we can help you consider how Coronavirus has impacted your business and if a loan is the answer for you.

Call 01603 516 304