The Bounce Back Loan (BBL) Scheme is a new scheme introduced by the government to help smaller businesses impacted by coronavirus (COVID-19). The scheme was launched on 4th of May.
It aims to assist those businesses to borrow between £2,000 up to 25% of a business’ turnover (the maximum amount available is £50,000).
The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year. Repayment term is fixed at six years.
Eligibility criteria for the loan
You can apply for a loan if your business:
- is based in the UK
- was established before 1 March 2020
- has been adversely impacted by the coronavirus
- Is not in bankruptcy, liquidation or undergoing debt restructuring
How to apply
There are 11 lenders participating in the scheme including many of the main retail banks. You should approach the bank you have business bank account with first via Bank’s website.
The lender will ask you to fill in a short online application form and self-declare that you are eligible.
The lender will decide whether to offer you a loan or another type of finance you’re your company will be responsible for repaying 100% of the amount borrowed.
What can you use the loan 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.
Can you repay early?
Early repayment is permitted at any stage, without early repayment fees.
Do you have to personal Guarantee?
No need to give personal guarantees. (meaning no recovery action can be taken over a principal private residence or principal private vehicle) Government guarantees the loan 100%
Where can you find more details?