How to apply for a coronavirus Bounce Back Loan
The coronavirus Bounce Back Loan Scheme (BBLS) is designed to help small businesses affected by COVID-19 to borrow between £2,000 and £50,000 and up to 25% of turnover.
There will be no repayments of the loan for the first 12 months, no interest for the first 12 months and no fees. The maximum term for the loan is 6 years.
The government is agreed with lenders to set the interest rate at 2.5% per annum. The government is also underwriting 100% of the loan, which should make it much easier to get than the CBILS one.
Of particular interest to many small business owners will be the condition that 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) and there is no fee to access the scheme.
To apply for a loan your business must: be based in the UK; have been negatively affected by coronavirus; not classed as an ‘undertaking in difficulty’ on 31 December 2019.
You cannot apply if your business is: a bank, insurer or reinsurer; a public sector body; a state-funded primary or secondary school.
You also cannot apply if you have already received a loan under the Coronavirus Business Interruption Loan Scheme (CBILS). Although you can ask for your lender to transfer your CBILS loan to a BBLS one until 4th November 2020.
The Bounce Back Loan Scheme is available through a government-approved list of lenders, including many of the big high street banks such as:
- Bank of Scotland