Bounce Back Loans

On Monday 27 April 2020, the Government announced a new set of loans aimed at small businesses - the Bounce Back Loan Scheme or BBLS.

Under BBLS, you can borrow between £2,000 and £50,000, capped at 25% of turnover.  The Government will provide 100% guarantee to lenders and will pay any fees and interest for the first 12 months.  After 12 months, all banks will charge a fixed 2.5% annual interest rate. The loans are set up to last 6 years, but can be repaid early without incurring a fee.  The Bounce Back Loan Scheme will be delivered through a network of accredited lenders.

On 2nd November 2020, the Government adjusted the Bounce Back Loan Scheme rules to allow those businesses who have borrowed less than their maximum (i.e. less than 25% of their turnover) to top-up their existing loan.  Businesses will be able to take-up this option from the week commencing 9th November 2020; they can make use of this option once.

Eligibility

You can apply for a loan if your business:

  • is based in the UK

  • has been adversely affected by coronavirus

  • was established before 1 March 2020

Who cannot apply?

The following businesses are not eligible to apply:

  • banks, insurers and reinsurers (but not insurance brokers)

  • public sector bodies

  • state-funded primary and secondary schools

You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).  However, if you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back
Loan scheme, you can arrange this with your lender until 4 November 2020.

Before the first repayment is due:

Your lender will contact you about further options:

  • extend the term of the 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

Applications opened on Monday 4th May. You’ll need to complete a short online form, although you won’t have to prove the future viability of the business.

The Government announced that applications for a BBLS loan will be open until 31st March 2021.