Small Business affected by COVID-19?
What are Bounce Back Loans and who are they for?
The Bounce Back Loan scheme offers 100 per cent government-backed loans worth up to 25 per cent of turnover to support small- and medium-sized UK businesses who have lost revenue or seen their cashflow disrupted due to the coronavirus crisis.
The scheme forms part of a wider package of government-backed support for UK businesses and employees, such as the Coronavirus Job Retention Scheme and Coronavirus Business Interruption Loan Scheme (CBILS).
The loans are for a minimum of £2,000 and a limit of £50,000 and will be delivered through a network of British Business Bank accredited lenders and partners. The government will cover interest and any fees for the first 12 months, with no repayments asked for in that time. A flat rate of 2. 5 per cent interest has been agreed between the government and lenders.
Loans will be of up to six years and lenders will not be required to run credit checks or assess the long-term viability of those businesses applying. The scheme has been designed to be quick and easy-to-access, with businesses applying through a short online form comprised of seven questions and cash said to be “arriving within days”.
Is my company eligible for a Bounce Back loan?
Any company that is based in the UK, has been negatively impacted by the coronavirus crisis and would benefit from finance of £50,000 or less can apply. Businesses must not have been in difficulty at December 31 2019 and must have been established in the UK by March 1 2020.
Companies must also not be in bankruptcy or liquidation or be undergoing debt restructuring at the time of applying. They must also derive over 50 per cent of income from its trading activity.
Loans are available to companies in all sectors, except for credit institutions, insurance companies, public-sector organisations and state-funded primary or secondary schools.
You cannot apply if your business has already claimed under a government-backed business interruption loan scheme. However, if you’ve received a loan up to £50,000 under CBILS, you can arrange with your lender to transfer this into the Bounce Back Loan scheme.
How can I apply?
You can apply for a Bounce Back Loan for your company by approaching a BBLS accredited lender, ideally your usual provider. You will then fill in a short online application form, self-certifying that your business is eligible for a loan under the scheme.
The lender will then make a decision about whether to offer you finance. If you are turned down, you can still approach other lenders within the scheme. If you are eligible then your company will be subject to appropriate customer fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks. Some state aid restrictions may also apply.