Bounce back loans - an update
The application process for the Bounce Back Loan Scheme opened on Monday 4 May. The scheme has been set-up to help smaller businesses impacted by coronavirus and is open to companies, partnerships or sole traders who are based in the UK, employ fewer than 250 people and have an annual turnover of no more than £45 million.
Details of the loans are as follows;
- loans range from £2,000 up to 25% of a business’ turnover capped at £50,000
- the loans have a six-year term but early repayment is allowed, without any early repayment fees
- the Government will make a Business Interruption Payment (BIP) to cover the first 12 months of interest payments
- the borrower must pay the interest for the remaining period of the loan. The interest rate on the loan is 2.5%
- no capital repayments are required for the first 12 months
- lenders are not permitted to take personal guarantees, the loans are 100% guaranteed by the government
- there is a one-page application that can be completed online
- no forecast financial information is required for the application
- the applicant’s business needs to derive more than 50% of its income from its trading activity (this does not apply to charities or further-education colleges)
You’re not able to apply for a Bounce Back Loan if you already have a loan in place under the Coronavirus Business Interruption Loan Scheme (CBILS).
However, if you’ve already received a loan of up to £50,000 under CBILS, you can transfer it to the Bounce Back Loan scheme. This needs to be arranged with your lender and you have until 4 November 2020 to do so.
How to apply
You can see which lenders have been accredited for the Bounce Back Loans here.
If your current banking provider is on the list, you need to apply for a loan with them in the first instance. Should they not approve your application, you can then apply to other lenders.
The application process can be completed online so visit your bank’s website to find out more.
If you have any questions, please get in touch with your usual contact at MHA Larking Gowen, or email email@example.com
You can find contact details on the Our People section of the MHA Larking Gowen website.