Rishi Sunak announced yesterday details for the new Bounce Back Loan Scheme. Small businesses will benefit from the new fast-track finance scheme, providing loans with a 100% government-backed guarantee for lenders. If you are a small business who struggled to get a CBILS loan then this could be for you.
The loans will be easy to apply for through a short, standardised online application. The loan should reach businesses within days – providing immediate support to those that need it as quickly as possible.
- Loans of between £2,000 and £50,000 / maximum of 25% of turnover
- Loan terms will be up to 6 years
- No fees or interest to pay for the first 12 months
- No loan repayments will be due during the first 12 months
- “….a low standardised level of interest for the remaining period of the loan”
- The government will provide lenders with a 100% guarantee for the loan
- No personal guarantees required
You can apply for a loan if your business:
- is based in the UK
- has been negatively affected by coronavirus
- was not an ‘undertaking in difficulty’ on 31 December 2019
- available to sole traders, partnerships, limited companies and LLP’s
The following businesses are not eligible to apply:
- banks, insurers and reinsurers (but not insurance brokers
- public-sector bodies
- further-education establishments, if they are grant-funded
- state-funded primary and secondary schools
Interaction with CBILS
You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (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 4 November 2020.
How do I apply?
The scheme will launch for applications on Monday 4 May. You will be able to access these loans through a network of accredited lenders.
The government are working with lenders to ensure loans delivered through this scheme are dealt with as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.
More information about the scheme will be published shortly.