Yesterday (Monday 27th April 2020) the Business Bounce Bank Loan was launched by the UK Government aimed at SME businesses looking to borrow between £2k – £50k. These new loans are 100% backed by the government and will open to applications on Monday 4th May. The loans will be fee and interest free for 12 months and have a total term of up to 6 years. The government will also work with lenders to agree a low interest rate for these loans.
The basic eligibilty criteria outlined by the government means you can apply for the 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
- Cover 25% of turnover
You cannot apply if your business is a;
- 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
and also you cannot apply if you are already claiming under the Coronavirus Business Interruption Loan scheme.
More details will be available over the coming days…
What if I’ve already applied for CBILS?
If you have already successfully applied for a Coronavirus Business Interruption Loan then you can not apply for Business Bounce Back Loan. However if you have received funds under £50k through CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.
Will the Bounce Back Loan be more accessible?
Looking at an update from the FCA today they have made some interim changes to the Consumer Credit Sourcebook. This relaxes some of the requirements about assessing credit worthiness.
How do I apply for a Bounce Back Loan?
Whilst the details of the scheme are still being worked on its likely that the application process will be a simple online process that takes a standardised approach across all lenders. The lenders offering the scheme will be busy working on the process ready for the start of applications at 9am Monday 4th May.
What are my options?
There are still a number of options available to businesses and the whole of the government schemes need to be looked together. J&J Commercial Finance can review all the schemes available and pull together a package for your business. By taking our FREE Business Finance review we can review cashflow forecasts to ensure that businesses are applying for the right amount.
Visit our Appointment page to book your Free Review