The “Bounce Back Loan Scheme” has this morning gone live and eligible businesses are now able to apply to the accredited lenders. The scheme is a watered-down version of the larger Coronavirus Business Interruption Loan Scheme (“CBILS”), which will come as a relief to many smaller businesses who may have felt overwhelmed by the onerous CBILS application scheme.
Whilst businesses looking to apply for a Bounce Back Loan may approach any accredited lender, they should first approach their own bank in order to expedite AML and KYC reviews. The initial list of accredited lenders is quite small, but this is expected to grow in the coming days: accredited lenders
Full details of business eligibility and the loan conditions can be found here, but a summary is as follows:
- Applications are made via lenders’ websites, through which businesses must self-certify their eligibility. Lenders have the final decision on whether to offer a facility or not, but, if rejected, businesses may make alternative applications to other lenders.
- Available to SME businesses impacted by the Coronavirus, but only those that were not in difficulty at 31 December 2019. Those businesses who have accumulated losses on their balance sheets should contact us to discuss whether or not they meet the definition of a business in difficulty.
- Businesses already in receipt of CBILS support cannot claim the Bounce Back Loan in addition, but may use the scheme to replace their CBILS facility if they so wish.
- The scheme will provide loan funding of up to 25% of the business’ turnover, subject to a maximum of £50,000.
- The first 12 months are repayment and interest-free, after which the interest rate will be no higher than 2.5% per annum.
- Loan terms up to 6 years available, but early repayment will also be fee-free.
- Bank cannot ask for personal guarantees as part of the application.
In other news, the Government has announced a top-up to the existing grant funding, aimed at those smaller businesses that were eligible for the earlier grant funding distributed to businesses based on their business rates values. Further details are awaited and we will provide an update as soon as these are made available.
If you have any questions regarding these measures or any of those previously announced, please feel free to contact us.