Good news, the government has today (4th May 2020) opened the ‘Bounce Back Loan Scheme – BBLS, thats another acronym we will have to get familiar with!
The scheme is designed to help small and medium-sized businesses to borrow from £2,000 up to 25% of their business’ turnover. The maximum loan amount is £50,000. Remember though this is a loan and not a grant, so it has to be repaid. The borrower remains 100% liable for the debt. Having said that, there are some positives.
- The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.
- The Government will make a Business Interruption Payment (BIP) to cover the first 12 months of interest payments and the borrower does not have to make any repayments for the first 12 months.
- The scheme provides the lender with a full (100%), government-backed guarantee against the outstanding balance of the finance (both capital and interest).
- Loan terms will be up to 6 years.
- The interest rate for the loans are set at 2.5% per annum.
- The scheme will be delivered through a network of accredited lenders.
Are you eligible?
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
You cannot apply if you are:
- a bank, insurer or reinsurers (but not insurance brokers)
- a public-sector body
- a state-funded primary and secondary school
- making a claim under the Coronavirus Business Interruption Loan Scheme (CBILS)