Bounce Back Loan Scheme (BBLS) Now Open for Applications
The Bounce Back Loan Scheme (BBLS) opened for applications today.
The BBLS will enable small and medium-sized businesses to borrow between £2,000 and £50,000, based on 25% of the business’s turnover.
Eligibility Criteria
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
- was established on or before 1 March 2020
What can I use the loan for?
The loan can only be used to provide an economic benefit to the business, for example providing working capital, and not for personal purposes.
Details of the loan and interest rate
- The Government will guarantee 100% of the loan
- There will not be any fees or interest to pay for the first 12 months
- Loan terms will be up to 6 years and no repayments will be due during the first 12 months
- The government has set the interest rate for this loan at 2.5% per annum
- Early repayment is allowed without any early repayment fees
- Businesses remain 100% liable to repay the full loan amount, as well as interest, after the first year
- 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).
The Scheme will initially be open until 4 November 2020, with the Government retaining the right to extend this.
Note: if you have already received a loan of up to £50,000 under Coronavirus Business Interruption Loan Scheme (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 long will it take to get the funds?
The Scheme has been designed to enable businesses to access finance quickly. Businesses are required to complete an online application form, which is expected to be assessed by their lender within a matter of days.
In some instances, the lender may ask you for additional information, such as an HMRC self-assessment tax return. Eligible companies will be subject to standard customer fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks.
When do I have to start making repayments?
The borrower is 100% liable for repaying the loan and any interest. The government will cover interest payable to the lender for the first 12 months.
The business will then need to make full repayments (the loan and any interest) up to the end of the six-year term, as per their arrangement with the lender.
What fees and interest will I be required to pay?
The government has set the interest rate for this facility at 2.5% per annum. Lenders are not permitted to charge any fees.
How do I find a lender?
You can find accredited BBLS lender on the following link: –
You will need to fill in a short application form online, which self-certifies that your business is eligible for a loan under BBLS. If one lender turns you down, you can still approach other lenders within the scheme.
Note that as there is likely to be a high demand for finance via the lenders and their phone lines may be busy and branches may not be able to handle enquiries in person.
What information will I need to give to a lender?
As part of the application process you will be required to declare, amongst other things, that:
- The business is engaged in trading or commercial activity in the UK at the date of the application, was carrying on business on 1 March 2020 and has been adversely affected by coronavirus (COVID-19).
- The business has not already received a Bounce Back Loan Scheme facility.
- The business has not yet obtained a loan through either the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, or the Covid Corporate Financing Facility, unless that loan will be refinanced in full by the Bounce Back Loan Scheme facility.
- The business is a UK limited company or partnership, or a sole trader resident in the UK
- At the time of submitting the loan application, the business is neither in bankruptcy, debt restructuring proceedings, liquidation or similar.
- More than 50% of the income of the business is derived from its trading activity. This confirmation is not required if the borrower is a charity.
- You will use the loan only to provide economic benefit to the business, and not for personal purposes. You have understood the costs associated with repayment of the loan and that you are able and intend to complete timely repayments in future.
The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.
Photo by Tobias Rehbein on Unsplash
