Bounce Back Loans are open for applications

Posted on 6th May 2020 by Streets

Image to represent Bounce Back Loans are open for applications

Around 110,000 small businesses applied for the new emergency loan scheme in the hours after it launched. With banks reporting an average loan of about £30,000, the support is calculated to have hit £3.3bn on day one.

The Scheme enables small businesses to apply for loans between £2,000 and £50,000. The maximum loan value is restricted to 25% of a business’ turnover. In contrast to the funding available via the Coronavirus Business Interruption Loan Scheme (CBILS), which is only backed by a Government guarantee of 80%, Bounce Back Loans benefit from a 100% Government guarantee. Whilst personal guarantees are not required for a Bounce Back Loan, applicants will need to demonstrate that the Covid-19 pandemic has impacted their business and that it was not already in difficulty at 31st December 2019. It should be noted that the Government’s loan guarantee only comes into play once all other means to recover the money have been exhausted.

The loan carries no interest for the first 12 months and then has a 2.5% rate applied. Borrowers will not have to begin principal repayments for the first 12 months, thereafter capital will be repaid on a straight line basis. The length of the loan is for six years but early repayment is allowed, without an early repayment fee. You will be able to make subsequent applications for additional or top up funding – it is therefore essential that you assess and apply for what you will need to support the business. However, consideration needs to be given to the affordability of any loan, along with the level of funding required.

Applications are to be made online through your existing bank. Your bank should also offer other business recovery services and so it is being advised that businesses of all sizes enquire with the bank they have a specific business account with already. There is nothing stopping you from applying elsewhere, but your process may take longer simply because of registering with a new provider.

If businesses are already receiving the Coronavirus Business Interruption Loan Scheme (CBILS) or are in the application process, then they will not be eligible for this as an additional loan.

For further information and to make an application please visit:

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