BBLS & CBILS

February 3, 2020by Sam Hosegood

The Bounce Back Loan Scheme (BBLS)

The BBLS enables smaller businesses to access finance more quickly during the coronavirus outbreak.

The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.

The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months after which the interest rate will be 2.5% a year.

The scheme has recently been extended to applicants until 31 March 2021.

If you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top up your existing loan to your maximum amount.

You must request the top-up by 31 March 2021.

Eligibility

You can apply for a loan if your business:

is based in the UK
was established before 1 March 2020
has been adversely impacted by the coronavirus

If your business was classed as a business in difficulty on 31 December 2019 you’ll need to confirm that you’re complying with additional state aid restrictions.

Who cannot apply

Businesses from any sector can apply, except:

banks, insurers and reinsurers (but not insurance brokers)
public-sector bodies
state-funded primary and secondary schools

If you’re already claiming funding

You cannot apply if you’re already claiming under:

If you’ve already received a loan of up to £50,000 under one of these schemes you can transfer it into the Bounce Back Loan scheme. You have until 31 March 2021 to arrange this with your lender.

How long the loan is for

The length of the loan is 6 years, but you can repay early without paying a fee. No repayments will be due during the first 12 months.

Before your first repayment is due, your lender will contact you about further options to:

extend the term of your loan to 10 years
move to interest-only repayments for a period of 6 months (you can use this option up to 3 times)
pause your repayments for a period of 6 months if you have already made at least 6 repayments (you can use this option once)

How to apply

There are 29 lenders participating in the scheme including many of the main retail banks. You should approach a suitable lender yourself via the lender’s website.

The lender will ask you to fill in a short online application form and self-declare that you are eligible.

The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.

Find a lender

The Coronavirus Business Interruption Loan Scheme (CBILS)

The CBILS helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million.

The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months.

The scheme has been extended until 31 March 2021.

If you’re a larger business, you may be entitled to other government support.

Eligibility

You can apply for a loan if your business:

is based in the UK
has an annual turnover of up to £45 million

You need to show that your business:

would be viable were it not for the pandemic
has been adversely impacted by the coronavirus

If you want to borrow £30,000 or more, you also need to confirm that your business wasn’t classed as a business in difficulty on 31 December 2019.

Who cannot apply

Businesses from any sector can apply, except:

banks, insurers and reinsurers (but not insurance brokers)
public-sector bodies
state-funded primary and secondary schools

How long the loan is for

The maximum length of the facility depends on the type of finance you apply for and will be:

up to 3 years for overdrafts and invoice finance facilities
up to 6 years, for loans and asset finance facilities

How to apply

There are 117 lenders participating in the scheme including all the main retail banks. You should approach a suitable lender yourself via the lender’s website.

You’ll need to tell the lender:

the amount you’d like to borrow
what the money is for
how long you’d like to pay it back

Supporting documents

You’ll need to provide documents that show you can afford to repay the loan.

These may include:

management accounts
cash flow forecast
business plan
historic accounts
details of assets

The documents required will vary from lender to lender and depend on how much you’re asking for. If you’re asking your existing lender for a small loan, the process may be automated and not require all of the documents.

The lender will check that the loan is:

for a suitable business purpose
affordable for you
the right type of finance for your needs

The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.

Find a lender

If you’d like any further information or help when it comes to applying for either the BBLS or the CBILS then get in touch with us and we’d be happy to help.