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:
- Coronavirus Business Interruption Loan Scheme (CBILS)
- Coronavirus Large Business Interruption Loan Scheme (CLBILS)
- COVID-19 Corporate Financing Facility
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.
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.
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.