You may of heard that the Government Bounce Back Loans (BBL) and Coronavirus Business Interruption Loan Scheme (CBILS) have been extended with application now closing on 31st January 2020. With that in mind we thought we would provide an update on what’s changed since they were first introduced.
Bounce Back Loans (BBL)
The BBL were designed to be quick and easy applications allowing businesses to apply for funding for up to a maximum of 25% of their actual or predicted turnover for 2019 or £50k (which ever is the lowest). With a lower interest rate of 2.5% over the 6 year term and no repayments for the first 12 months the scheme was a life line to a number of businesses.
You must be
- Based in the UK
- Established before 1st March 2020
- adversely impacted by coronavirus
The length of the BBL was initially set at 6 years but you can repay early without any fees, before your first repayment is due the lender that you applied with will contact you about further options
- Extend the term of the loan to 10 years
- Move to interest only repayments for a period of 6 months
- pause your repayments for a period of 6 months (subject to 6 months payments already being made)
Top ups – If you took out a BBL but borrowed less than you were entitled to, you can now top up your existing loan to your maximum amount. This request must be done with the lender that you already hold the BBL with and reflect your turnover stated in the original application – it will not extend the term of the BBL and repayments will start from 12 months from the initial loan being taken out.
How to Apply?
You should approach the lender that you have an existing relationship with for your business transactions. A number of lenders have stopped accepting applications from new customers. For top ups this is subject to minimum increase of £1,000 with a lot of lenders and you must ensure the details match to your initial application. If you do not have an existing relationship with one of the accredited lenders then it is proving extremely difficult to access the scheme.
Coronavirus Business Interruption Loan Scheme (CBILS)
CBILs was the first government lending scheme to go live following Covid-19 and as a result had a few teething problems in its early days. With the increase in lenders now offering CBILs it has made the scheme more accessible. CBILs can be used for Invoice Financing, Asset Finance and Term Business Loans.
Its probably easier to say what hasn’t changed – the scheme has evolved significantly over the past 6 months making in more accessible. The key criteria is still 25% of turnover or your liquidity needs going forward. But what is clear it that those that were declined early on in the scheme now have options available again to them. The level of information needed has also reduced so bank statements and accountants in normally sufficient if looking at 25% of turnover.
How to apply?
J&J Commercial Finance work with a number of the accredited lenders for this scheme and can process applications on your behalf. As we know the lenders and the types of businesses and transactions they like we are able to place your application with the best lender for your circumstances. We will also work with your accountant to collate all the necessary pieces of information.
Businesses that have used the BBL scheme and require further funding can convert their BBL into the CBILs scheme – as long as the BBL is repaid as part of the application in affect refinancing the BBL whilst drawing additional funds.
Looking to apply or need more information then contact us on 01709 805 624 or email info@JJCommercialFinance.co.uk
The CBILs and BBL are schemes administered by the British Business Bank – further details about the scheme and the accredited lenders can be found on their website.