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.
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;
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