Coronavirus Business Bounce Back Loan
The Coronavirus Business Bounce Back Loan has been introduced to support small and medium sized businesses suffering due to the current COVID-19 Coronavirus crisis. Here are the details of today’s newsletter sent to clients at 8am on morning of 28 April 2020 with what we know about how this loan will operate so far.
I am sure many of you will have heard the government’s latest announcement of new funding available for small and medium sized businesses.
This has been called the ‘Coronavirus Bounce Back Loan’ and is available for small and medium sized businesses to apply for from May 4 2020.
· 100% guaranteed by the Government
· Terms for up to six years
· No fees or interest due for first 12 months
· No repayments due during first 12 months
· Low interest rates after initial 12 month interest free period
· Delivered via a network of accredited lenders
· UK based businesses
· Negatively affected by Coronavirus
· Not an ‘undertaking in difficulty’ on 31 December 2019
Certain businesses and industries are excluded, including the following:
- 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
I am already receiving a CBILS Loan – can I apply?
No, however if your loan via CBILS is less than £50,000, then you can apply to transfer it into a Bounce Back Loan so long as you arrange this directly with your lender and before 4 November 2020.
How much can I borrow?
The scheme has been set up to provide loans of between £2,000 and £50,000 and the Government have said that loans are likely to be capped at 25% of business turnover. You can find your turnover figure on your last set of accounts.
What criteria will they base the loan on?
This is still to be published, but what we are led to understand so far is that while there will be some checks on applications, these are likely to be limited to fraud investigations. It is unlikely that there will be any forward looking test of business viability or cash flow forecasting requirement.
How quickly will I be able to get a loan?
The scheme is set to open at 9am on Monday 4th May 2020, and the Government and lenders are hoping that successful applicants will have their money within 24 hours of applying.
You can read more detail about the scheme here:
I hope this is useful for you – rest assured we will send further updates on both this and the SEISS for self employed as soon as they become available.
In the meantime continue to look after yourselves and stay safe.
Very best wishes,