Coronavirus: Bounce Back Loans

On 27 April, the government announced that it is launching a new small loan scheme, Bounce Back Loans

Headline terms of the Bounce Back Loan scheme are as follows:

  • The Scheme launched on 4 May 2020
  • It is aimed at providing access for small and medium-sized businesses to loans from £2,000 up to 25% of a business’ turnover or £50,000, whichever is lower.
  • The government will guarantee 100% of the loan, rather than 80% as is the case with CBILS (The borrower always remains 100% liable for the debt).
  • Loan terms will be up to 6 years, but early repayment is allowed, without fees.
  • There are no principle repayments due for the first 12 months.
  • Interest rate fixed at 2.5%, and the interest is paid by the Government for 12 months with a Business Interruption Payment to lenders.
  • No personal guarantees are allowed and no recovery action can be taken over a principal private residence or principal private vehicle.

As with Coronavirus Business Interruption Loan Scheme, the Bounce Back scheme will be delivered through a network of accredited lenders.

Click here to see the latest list of accredited providers.

Eligibility

Applicants will need to fill in an online application form. This self-certifies a business is eligible for a loan under the BBLS.

You can apply for a loan if your business:

  • Is UK-based in its business activity, and established by 1 March 2020
  • Has been negatively affected by Coronavirus
  • Is not in bankruptcy, liquidation or undergoing debt restructuring

The following businesses are not eligible to apply:

  • Banks, insurers and reinsurers (but not insurance brokers)
  • Public-sector bodies
  • Further-education establishments, if they are grant-funded
  • State-funded primary and secondary schools

A key point to note is that businesses already claiming under CBILS cannot apply for Bounce Bank Loans. However businesses that have already received a loan of up to £50,000 under CBILS, will be able to transfer this loan into the Bounce Back Loan scheme via arrangement with their CBILS lender before 4 November 2020.

Further details are limited at this stage with more to follow in terms of applying for these loans. However we will update this page as it become available.

For further information or advice on funding for your business, please get in touch with a member of our Corporate Finance team on 01903 234094.

Last updated 4 May, 2020.