Coronavirus: Bounce Back Loan Scheme Details…
Further details in relation to the BBLS have now been announced including a list of accredited lenders and instructions on how to apply.
Who is it for?
The scheme is intended for businesses that are losing revenue and seeing disruptions in cashflow due to the Coronavirus outbreak. Offering smaller sums that the Business Interruption Loans, the Bounce Back Loan scheme is for businesses that can benefit from £50,000 or less in finance.
How does it work?
Much like the Business Interruptions Loans, BBLS is available through a range of British Business Bank accredited lenders and partners, but the application process is put forward as being much simpler with a swifter response rate and rapid receipt of funds if eligible.
- Loans range from £2,000 up to 25% of a business’ turnover. The maximum loan amount is £50,000.
- The length of the loan is six years, but early repayment is allowed, without early repayment fees.
- There is no fee to access the scheme for either businesses or lenders.
- Lenders are not permitted to take personal guarantees over a borrower’s personal assets.
- The scheme provides the lender with a full (100%), government-backed guarantee against the outstanding balance of the finance (both capital and interest).
- The borrower remains 100% liable for the debt.
- The Government will make a Business Interruption Payment to cover the first 12 months of interest payments.
- The borrower does not have to make any repayments for the first 12 months.
- The interest rate for the facility is set at 2.5% per annum.
Who is Eligible?
Your business must be able to self‑declare to the lender that it:
- has been impacted by the coronavirus (COVID-19) pandemic
- was not a business in difficulty at 31 December 2019 (if it was, you must confirm your business complies with additional state aid restrictions under de minimis state aid rules)
- is engaged in trading or commercial activity in the UK and was established by 1 March 2020
- is not using the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) or the Bank of England’s Covid Corporate Financing Facility Scheme (CCFF), unless the Bounce Back Loan will refinance the whole of the CBILS, CLBILS or CCFF facility
- is not in bankruptcy or liquidation or undergoing debt restructuring at the time it submits its application for finance
- derives more than 50% of its income from its trading activity