Coronavirus: Bounce Back Loans
Headline terms of the Bounce Back Loan scheme are as follows:
- The Scheme will launch on 4 May 2020
- It is aimed at providing access for small and medium-sized businesses to loans between £2,000 and £50,000.
- As with Coronavirus Business Interruption Loan Scheme, the Bounce Back scheme will be delivered through a network of accredited lenders and there won’t be any fees or interest to pay for the first 12 months.
- The government will guarantee 100% of the loan, rather than 80% as is the case with CBILS.
- Loan terms will be up to 6 years with no repayments during the first 12 months.
- The government have stated they will work with lenders to agree a low rate of interest for the remaining period of the loan.
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
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
A key point to note is that businesses already claiming under CBILS cannot apply for Bounce Bank Loans. However businesses that have already received a loan of up to £50,000 under CBILS, will be able to transfer this loan into the Bounce Back Loan scheme via arrangement with their CBILS lender before 4 November 2020.
Further details are limited at this stage with more to follow in terms of applying for these loans, however we will update this page as it become available.
This blog was originally written by our colleagues at MHA Carpenter Box.