Bounce Back Loans

Last week the chancellor announced a new loan scheme which will run alongside the existing CBILS and CLBILS schemes. This scheme has been designed to ensure that UK based small businesses who have been negatively affected by Coronavirus and who were not in difficulty on 31 December 2019, but need vital cash injections to keep operating, can get finance within a matter of days.

The Bounce Bank Loans (BBLS) allow businesses to borrow between £2,000 and £50,000, the loans will be interest free for the first 12 months and businesses can apply online through a short and simple form.

Unlike CBILS these loans will be 100% guaranteed by the UK Government to the lender but applicants remain personally liable for the loan.

The level of lending available will be restricted to 25% of your business turnover i.e. to access £50,000 you will require a business turnover of £200,000 or more.

You cannot apply if you have already claimed funding under CBILS, however you can apply to transfer any CBILS lending already in place (up to £50,000) to the Bounce Back Loan, you have until 4 November 2020 to do this and this will be arranged with your lender.

Applications for the loans opened yesterday and should be made through the British Business Bank accredited lenders and further information can be found here https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/loans/ on eligibility criteria and how to apply through one of the accredited lenders.

WHAT YOU SHOULD DO TODAY

Consider your working capital requirements over the next few months and whether a BBLS application is appropriate for your business.