Through the Bounce Back Loan Scheme (BBLS), additional support is now being offered to small businesses. In this article we’re taking a look at what the Bounce Back Loan Scheme is and what you need to know as a small business.
What is The Bounce Back Loan Scheme?
The Bounce Back Loan Scheme is being offered by the British Business Bank‘s accredited providers. It is a loan designed to provide support to small businesses during the Coronavirus crisis.
How Much Does The Bounce Back Loan Scheme Provide?
The Bounce Back Loan Scheme offers of up to £50,000. Funding through the loan starts at £2,000 and can go as high as 25% of a business’ turnover or up to £50,000 (whichever is the lower sum).
What Are The Payment Terms?
We’ve outlined the payment terms described by the British Business Bank below. For the full list please read this article.
- Term: This is a 6-year term loan, but early repayment will be allowed without early repayment fees.
- Interest Rate: This has been set by the government at 2.5% per year. This rate will apply to all business so that all can benefit from the same low interest rate.
- Interest Repayments: For the first year or 12 months of the loan, the government will cover the payable interest, through a Business Interruption Payment to the participating lenders. This means there are no upfront costs associated with the loan.
- Principal Repayments: Principal repayments will begin after the first year or 12 months of the loan.
- Personal Guarantees Aren’t Included: The loan cannot be taken out as a personal guarantee, for a principal private residence, or principal private vehicle.
Who is Eligible?
If you are interested in applying for The Bounce Back Loan Scheme you must meet the following eligibility criteria outlined by the British Business Bank:
- Be able to confirm that you operate a UK-based business which was established before March 1, 2020
- Provide confirmation that your business has been negatively effected by the Coronavirus
- You must not be currently receiving a government-backed Coronavirus Loan Scheme. – One exception is noted here, you may be able to apply for the loan if you are using the funds to refinance an entire facility.
- Your business must not be in bankruptcy, liquidation, or in the process of debt restructuring.
For more information on eligibility criteria please click here.
Which Lenders Can I Obtain a Loan Through?
The British Business Bank has outlined a full list of the accredited lenders who are participating in the scheme. To find out which loan providers are offering this loan in your area visit this page.
When is The Deadline to Apply By?
As the BBLS is a temporary initiative to support small business during the Coronavirus crisis, the government has specified that the loan scheme will initially be available until the 4th of November 2020.
Where Can I Find Out More Information?
For further information and resources on the BBLS visit these pages:
- Small Businesses Boosted by Bounce Back Loans – GOV.UK
- New Bounce Back Loan Scheme Opens For Smallest UK Businesses – British Business Bank
- FAQs For Small Businesses: Bounce Back Loan Scheme – British Business Bank
- Bounce Back Loan Scheme Current Accredited Lenders and Partners – British Business Bank