Everything you need to know about the Bounce Back Loan Scheme
What is it?
The Bounce Back Loans scheme will offer loans from £2,000 up to 25% of a business’ turnover or £50,000, whichever is lower. The Government will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. The government has then set the interest rate for this facility at 2.5% per annum for subsequent years. No repayments will be due during the first 12 months. Length of the loan is for six years. There will be a short, standardised online application to apply for a loan. The scheme is now open for applications and firms will be able to access these loans through a network of accredited lenders.
Am I eligible?
Your business must be able to self‑declare to the lender that it:
- has been impacted by the Coronavirus pandemic.
- was not a business in difficulty at 31 December 2019 (if it was, you must confirm your business complies with additional state aid restrictions under de minimis state aid rules).
- is engaged in trading or commercial activity in the UK and was established by 1 March 2020.
- is not currently using a government-backed Coronavirus loan scheme, unless the Bounce Back Loan will refinance the whole of the CBILS, CLBILS or CCFF facility.
- is not in bankruptcy or liquidation or undergoing debt restructuring at the time it submits its application for finance.
- derives more than 50% of its income from its trading activity (this requirement does not apply to charities or further-education colleges).
Bounce Back Loans are available to businesses in all sectors, except the following:
- Credit institutions (falling within the remit of the Bank Recovery and Resolution Directive)
- Insurance companies
- Public-sector organisations
- State-funded primary and secondary schools
The borrower remains fully liable for the debt.
What do I need to do to access it?
You will need to fill in a short application form online, which self-certifies that your business is eligible for a loan under BBLS. If your business is eligible, it will be subject to appropriate customer fraud, Anti-Money Laundering and Know Your Customer checks. Some state aid restrictions may apply to your application.
Who do I need to speak to?
You should speak to your business banking provider or one of the accredited lenders. With high demand for BBLS facilities, finance providers recommend that you approach a lender via their website. Phone lines are likely to be busy and branches may not be able to handle enquiries in person.