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:

https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan


No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.

Information

The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.


Expert insight and news straight
to your inbox

Related Articles


Is it time to reflect on the culture of your organisation?

Having been involved in recruitment interviews recently, in which seemingly all applicants asked what the culture of the organisation was like, it did give rise to reflection on the same and what is meant by culture and how it affects the success or otherwise of an organisation. Organisational ...


Class 4 NICs who is liable?

Most self-employed people are required to pay Class 4 National Insurance contributions (NICs) if their profits are £12,570 or more a year. Class 4 NIC rates for the tax year 2024-25 are 6% (2023-24: 9%) for chargeable profits between £12,570 and


Post Transaction Valuation Checks

A Post Transaction Valuation Check (PTVC) can be requested from HMRC for an individual to work out a capital gains tax liability or for companies to calculate corporation tax liability on chargeable gains. The request for a PTVC should be made using


You might also be interested in...