The Bounce Back Loan was introduced by the government to help small businesses access financing easily during the Coronavirus. It is a 100% state backed loan where businesses and self employed workers can access up to £50,000 loan, and the first 12 months of its receipt, it is interest free and the business owners are not obligated to make repayments.
This scheme is different from the Coronavirus Business Interruption Loan Scheme however you can switch from this loan to the Bounce Back Loan if you the terms are more favourable.
What is it?
The Bounce Back Loan was introduced in May 2020 and allows business and self-employed workers access financing during the Coronavirus.
- You can borrow from £2,000 to £50,000 which is capped at 25% of the total turnover
- No interest charged and no obligated repayments for the first 12 months.
- After the first 12 months, the annual interest rate is fixed at 2.5%
*You may repay the loan early without incurring a penalty charge.
Who is eligible?
The Bounce Back Loan is available for business who :
- Are based in the UK
- Have been affected negatively by the Coronavirus pandemic
- Has been set up and trading prior 1st March 2020
- It is not bankrupt or in liquidation as at the time of application
- More than 50% of the income is from trading activities.
Please note that you will be unable to apply for the Bounce Back Loan if you are already claiming finance under:
- Coronavirus Business Interruption Loan Scheme (CBILS)
- COVID-19 Corporate Financing Facility
- Coronavirus Large Business Interruption Loan Scheme (CLBIS)
However, if you have already received financing under one of these schemes you can arrange with your lender and have it transferred to the Bounce Back Loan before 4th November 2020.
How can I apply?
Currently there are 11 lenders participating in the scheme. You can search for lenders here and if one lender turns you down, you can use other lenders in the scheme.
You can apply by checking the lenders website and filling a short application form only declaring your eligibility. The lender will get back to you with their decision on whether they will offer you the loan or another type of financing. You are then responsible for the repayment of the total amount borrowed.
When applying, the lenders will need you to provide:
- information about the amount you are borrowing
- information about the purpose of the loan (what the loan is for)
- information about the period of the repayment of the loan to decide if it is suitable for you.
They will need you to provide supporting documents which may include:
- Management accounts
- Historic accounts
- Details of assets
- Business plan
Please note that if you are approaching an existing lender for a smaller amount, it may be automated and may not require the same number of documents.
If you need further advice regarding this, please contact us at firstname.lastname@example.org alternatively you can call us on 01279 772 966