Applications open today for Bounce Back Loan Scheme

Following the Chancellor of the Exchequer’s announcement on 27 April, the Bounce Back Loan (BBL) Scheme opens for applications from today (4th May).

Delivered by lenders accredited by the British Business Bank for this scheme, Bounce Back Loans target small and micro businesses in all sectors, providing loans from £2k up to 25% of the business’ turnover with a maximum loan of £50k.

Providing lenders with a 100% government-backed guarantee and standardising the application form is expected to lead to a faster process with many loans becoming available within days.

Scheme Features

-Loans will be from £2,000 up to 25% of a business’ turnover or £50,000, whichever is lower

-The scheme provides the lender with a government-backed, 100% guarantee against the outstanding facility balance, both capital and interest

-Interest paid by government for the first 12 months. The government has then set the interest rate for this facility at 2.5% per annum for subsequent years

-No principal repayments for first 12 months

-No guarantee fee for businesses or lenders to access the scheme

-Length of the loan is for six years but early repayment is allowed, without early repayment fees

-No personal guarantees are allowed, and no recovery action can be taken over a principal private residence or principal private vehicle

Eligibility Criteria

The business must self-certify to its lender the following:

-Confirm it is UK-based in its business activity, and established by 1 March 2020

-Confirm it has been adversely impacted by the Coronavirus (Covid-19)

-Confirm it is not currently using a government-backed Coronavirus loan scheme (unless using BBLS to refinance a whole facility)

-Confirm it is not in bankruptcy, liquidation or undergoing debt restructuring

How to apply

-Businesses should check the British Business Bank website to find out which lenders provide Bounce Back Loans

-Businesses will be required to fill in a short online application form on their lender’s website, which self-certifies whether they are eligible for a Bounce Back Loan facility

-Eligible companies will be subject to standard customer fraud, Anti-Money Laundering and Know Your Custom checks. Some State aid restrictions may apply to applications