By Emily Win
This article was updated on 17th February 2021.
On Monday 27th April the government announced the Bounce Back Loan Scheme. Here are the key details that have been shared with us so far. You can also watch my video for the highlights.
What is the Bounce Back Loan Scheme?
The bounce-back loan scheme is providing loans to businesses with a 100% government-backed guarantee for lenders. It is designed to provide smoother access to cash for small companies facing difficulty accessing existing government-backed lending.
How much can the company borrow?
Businesses will be able to borrow up to 25% of turnover, between £2,000 and £50,000.
What is the borrowing cost?
What is the term of the loan?
Originally up to 6 years with the option to extend to 10 years under the Pay as You Grow Scheme.
What are the eligibility criteria for this loan?
What is the definition of a "business in difficulty" on 31 December 2019?
Can companies access this funding in addition to the CBILS scheme?
Businesses can not apply for bounce-back loans when also applying for CBILS or have already entered into a CBIL arrangement.
What if I already have a CBILS agreement for up to £50,000?
If you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.
When will repayments be due?
What is the interest rate post the initial 12 month period?
Are there any fees for early repayment?
No. Early repayment is allowed, without any early repayment fees.
Will companies only be able to apply for this with the lender their business banking is held with?
How do I apply?
Is any personal guarantee required?
No. Lenders are not permitted to take personal guarantees or take recovery action over a borrower’s personal assets (such as their main home or personal vehicle).
How long is the scheme open for?
Until 4 November 2020 but the government retains the right to extend this.
If my loan is accepted, when will I receive the money?
What other points should I, as director of the business, consider when deciding if to apply for a bounce back loan?
What can the loan be used for?
The business must confirm to the lender that the loan will only be used to provide an economic benefit to the business, for example providing working capital, and not for personal purposes.
When can I apply?
Where to go to for more help?
Get in touch if you would like assistance in making a bounce back loan application.