What is the Bounce Back Loan, how much can you receive, and is your business eligible for quick finance?
Today, the government has opened up applications for the Bounce Back Loan.
Part of chancellor Rishi Sunak’s ongoing economy-boosting aid measures during COVID-19, the loan helps small and medium-sized businesses secure finance of up to 25% of their turnover.
Eligible businesses will receive a minimum of £2,000, up to a limit of £50,000.
There are no fees, and borrowers won’t pay any interest for the first 12 months. Beyond that, the yearly interest rate is set at 2.5%. The government guarantees 100% of the loan against the outstanding balance of the finance (both capital and interest).
Business Secretary Alok Sharma said:
“This new scheme of 100% government-guaranteed loans gives owners of even the smallest businesses the confidence and flexibility to borrow a sum which works for them. This will help ensure they can continue to trade, and be a key part of our efforts to reboot the British economy.”
To be eligible, your business needs to:
- Be based in the UK
- Have been established by 1st March 2020
- Not qualify as a “business in difficulty” as of 31st December 2019
- Have been negatively affected by coronavirus
Banks, insurers and reinsurers, public-sector bodies, and state-funded primary and secondary schools are not eligible for the Bounce Back loan.
You also won’t be eligible if you’re already receiving funding through the Coronavirus Business Interruption Loan Scheme (CBILS). However, you can transfer funding claimed through the CBLIS into the Bounce Back scheme by contacting your lender before 4 November 2020.
The loan is backed by the government, though the actual finance is provided by a third-party creditor. When applying, you’ll need to select an accredited lender from a list, and approach it directly – ideally via its website. The application form is just seven questions long.
As Sunak adds,
“Small businesses will play a key role creating jobs and securing economic growth as we recover from the Coronavirus pandemic. The Bounce Back loan scheme will make sure they get the finance they need – helping them bounce back and protect jobs.”
You can apply for the BBLS through the British Business Bank by clicking here.
