The Bounce Back Loan Scheme was launched on 4 May. Early reports suggest it is very efficient, with some claimants receiving cash within hours of application. What is it, and can you benefit?
Smaller businesses have reported difficulty in accessing the Coronavirus Business Interruption Loan Scheme (CBILS). CBILS loans are only 80% guaranteed by the government and directors have had to provide personal guarantees over the remainder in many cases. There are also reported delays in funds being paid.
In response to this the government launched the Bounce Back Loan Scheme (BBLS) for SMEs on 4 May. It’s 100% backed by the government and early indications show that it’s much improved, with some funds being received on the day of application.
Terms. The BBLS has interest capped at 2.5%. There are also no payments to make in the first twelve months, allowing an opportunity to recover your trading. This will then need to be repaid within six years. You can apply for a loan of between £2,000 and £50,000.
Eligible? In order to qualify, your business must be based in the UK, not be in the banking or insurance sector, not be a public body or publicly funded school and have been established before 1 March 2020. You must have been adversely affected by the coronavirus pandemic.
There are further conditions if your business was “in difficulty” on 31 December 2019. For further information on this, as well as links to participating lenders refer to the official guidance here.
Other loans. If you already have a loan through one of the other schemes, e.g. CBILS, you cannot apply. However, if your existing loan doesn’t exceed £50,000 you can transfer it to the BBLS. You will need to contact your lender by 4 November to do this.
What to do next
For further information on this and other topics contact us on 07974-418819, directly to Tony using email@example.com or through the contact page of the website http://www.milestone-solutions.co.uk