COVID-19 Bounce Back Loan
On the 27th April 2020 Chancellor Rishi Sunak announced the planned introduction of a 100% state-backed loan scheme for small businesses, called the Bounce Back Loan scheme. This scheme is part of other coronavirus measures that were introduced in March 2020.
Please note: As the announcement was only made yesterday (at time of writing) there aren't too many details yet, however, we will be updating this page as soon as announcements are made public.
What is the COVID-19 Bounce Back Loan Scheme?
The Bounce Back Loan scheme aims to help small and medium-sized businesses that want to borrow between £2,000 and £50,000.
The government will guarantee 100% of the loan and there won't be any fees or interest to pay for the first 12 months. Although the government is guaranteeing the loan to the bank, this does not mean that your business will not need to repay the loan. The guarantee is only there if your business fails.
Initial announcements from the government state that loan terms will be up to 6 years and that no repayments will be due during the first 12 months. The government has assured businesses that they will work with lenders to agree a low rate of interest for the remaining period of the loan.
The scheme will be delivered through a network of accredited lenders, so you will need to apply at a bank for the Bounce Back Loan and not with HMRC.
Who is eligible for the Bounce Back Loan Scheme?
Current guidance states that you can apply for a loan as part of this scheme if your business meets the following criteria:
- It is based in the UK
- It has been negatively affected by coronavirus
- It was not an "undertaking in difficulty" on 31st December 2019
Can you apply for the Bounce Back Loan Scheme and the CBILS scheme?
You can apply for both, however, you cannot claim the Bounce Back Loan if you are already claiming under CBILS.
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 4th November 2020.
How to apply for the Bounce Back Loan Scheme?
Currently you cannot apply for the scheme as it was only announced yesterday. However, the scheme will launch on May 4th 2020 and more information will be released in due course. We will publish updates to this article as they are announced.
If you have any questions, please feel free to reach out to us on Twitter.