Whole world is facing economic slowdown and almost every small business has been adversely affected due to COVID-19. In order to provide financial support to small businesses in this unprecedented times, UK government came forward and introduced “Coronavirus bounce back loan scheme” for those eligible small & medium sized businesses that are adversely affected by the impact of COVID-19 and in a sheer need of money for the survival of their business.
- What is Coronavirus bounce back loan scheme?
- Who can apply?
- Who cannot apply?
- What if you are already claiming Coronavirus funding?
- How to apply?
What is Bounce Back Loan Scheme (BBLS)?
Bounce back loan scheme is a new loan scheme introduced by UK government in order to provide financial help to those eligible small & medium sized businesses who are adversely affected by Coronavirus outbreak.
As per this scheme, qualifying small & medium sized businesses can borrow between £2000 and up to 25% of their turnover. However, maximum loan amount available is £50000. The loan will be provided for maximum tenure of 6 years but it can be extended to 10 years. You can also repay your loan amount early without paying any early repayment fees to the government. Bounce back loans are 100% guaranteed by the government (only 80% loan was guaranteed by the government at the time of Coronavirus business interruption loan scheme) and there will be no fees or interest charged by the government for first 12 months. After the completion of 12 months, interest rate will be charged at an affordable rate of 2.5% annually. The scheme is open to applications until 31st March 2021.
In case you want a big loan, you should look out for other schemes introduced by the government for small & medium sized businesses.
Note - This is a borrowed loan and the borrower is fully liable for the debt
Who can apply for Bounce Back Loan Scheme?
You can apply for a loan if your business –
- is UK based
- was incorporated before 1st March 2020
- is adversely affected by the coronavirus outbreak
- is not in liquidation, bankruptcy or undergoing debt restructuring
In case your business was categorised as “Business in difficulty” on 31st December 2019, you have to confirm that you are compliant with additional state aid restrictions.
Who cannot apply for Bounce Back Loan Scheme?
Every business sector can apply for this scheme except the following –
- Public sector bodies
- Banks, insurers & reinsurers (but not insurance brokers)
- Primary & secondary schools funded by the state
If you are already claiming coronavirus funding
You are not eligible to apply for coronavirus bounce back loan scheme if you are already claiming funds under the following schemes
- COVID-19 corporate financing facility
- Coronavirus business interruption loan scheme
- Coronavirus large business interruption loan scheme
In case you have already received a loan up to £50000 under any of the above mentioned schemes, you can transfer the same into the bounce back loan scheme but you need to arrange this with your lender until 4th November 2020.
How to apply for Bounce Back Loan Scheme?
Currently, there are 11 lenders who are participated in this scheme which includes many of the main retail banks too. You can select any of the lenders as per your choice via lender’s website. You only need to fill a short online application form given by the lender and self-declare that you are adversely affected by coronavirus and eligible for this loan scheme.
Now, it’s the lender call to decide whether loan or any other finance will be provided to you or not. Borrower needs to repay 100% of the amount borrowed from the lender. In case one lender turns you down, you can apply to any other lender under this scheme.
Contact DNS Accountants
In case you want more information or advice on Coronavirus bounce back loan scheme, kindly call us on 03330886686 or you can also e-mail us at firstname.lastname@example.org
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