On the back of widespread concern about the lack of availability of loans under the Coronavirus Business Interruption Loan Scheme the government has introduced a new scheme aimed at smaller businesses.
The loan scheme is now available via banks and here’s a summary of what we know so far…
- Apply for a loan amount between £2,000 and £50,000.
- Capped at 25% of your businesses turnover, in the 2019 calendar year.
- The government are guaranteeing loans 100%: meaning all who meet the criteria should be accepted.
- The government covers the first year of interest payments and there are no capital repayments for the first year.
- A “simple form” and funds paid within 24 hours.
(Updated Monday 4th May 2020)
Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan.gov.uk
Am I eligible?
You can apply for a loan if your business:
- is based in the UK
- has been negatively affected by coronavirus
- includes Sole Traders
The scheme is open to the vast majority of businesses with no cap on size. Businesses in the public sector, banks and education are excluded. Full details at the British Business Bank or check with your lender.
The scheme will be open until 4th November 2020. You cannot apply if you have already received a CBILS loan but you can transfer it to this scheme before that date (if less than £50,000).
As a 100% guaranteed loan scheme, the price of BBLS is critical to its success: together, we need to ensure that these loans are affordable and accessible. As such, and incorporating a range of data, I have come to the decision that the rate should be set at 2.5%.Chancellor Rishi Sunak in an open letter to the banks (Source: gov.uk)
Where to Apply
These are the only banks which are currently offering the loans. More are to come later this week.
To apply please log in to your Barclays online banking (this product will be available in mobile banking by the end of the week).
The option to apply is under Products and Services – Business Loans and is a simple form which should take between 10-15 minutes.Application Guidance from Barclays
Apply for a Bounce Back loan (gov.uk)
FAQs for Small Businesses: Bounce Back Loan Scheme (British Business Bank)
1/ Today, we’re announcing a new loan scheme. A simple, quick, easy solution for those in need of smaller loans.— Rishi Sunak #StayHomeSaveLives (@RishiSunak) April 27, 2020
Businesses can apply for new Bounce Back Loans up to a maximum of £50,000, or 25% of turnover, with the government paying the interest for the first 12 months. pic.twitter.com/aBYcUkR9sR