Bounce Back Loan Scheme (BBLS)
The Bounce Back Loan Scheme (BBLS) is designed to support businesses that are losing revenue and seeing disruption to their cashflow as a result of COVID-19. It enables those businesses to gain quick access to financial support of up to £50,000.
Finance is available through a range of lenders and partners accredited by the British Business Bank. Loans start from £2,000. Some lenders are no longer accepting applications from new customers, please check before applying.
If you receive a Bounce Back Loan, you don't have to make any repayments in the first 12 months, while the Government covers the interest payments during the same period. This means there's nothing to pay in the first year.
As of 17 December 2020, the Government has announced that it will be extending the Bounce Back Loan Scheme (BBLS) until 31 March 2021.
What can I use the loan for?
You must confirm to the lender that you'll only use the loan to provide an economic benefit to your business (for example, providing working capital), and not for personal purposes.
If the business was a “business in difficulty” on 31 December 2019, you cannot use a Bounce Back Loan for export-related activities .
There are no limits on how much of the facility you use for refinancing.
How much can I apply for?
Loans range from £2,000 up to 25% of a business’ turnover. The maximum loan available under the scheme is £50,000. The Government will cover the interest repayments for the first 12 months.
The government-backed guarantee on the loan is a guarantee to lenders. Your business remains 100% liable for repaying the full amount of the loan, as well as interest, after the first year.
How long will it take me to get the funds?
The scheme is designed to enable businesses to access finance quickly. You must complete an online application form, which you can expect your lender to assess within a matter of days.
In some instances, the lender may ask you for additional information, such as an HMRC self-assessment tax return. If you're considered eligible for a loan, your application will undergo customer fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks.
When do I have to start repayments?
You are 100% liable for repaying the loan and any interest. For the first 12 months, the Government will cover interest payable to the lender. You'll then need to make full repayments (the loan and any interest) up to the end of the six-year term, as per your arrangement with the lender.
What fees and interest will I have to pay?
The Government has set the interest rate for this facility at 2.5% per annum. Lenders are not permitted to charge any fees.
What term can I borrow this over?
Loans under the Bounce Back Loan Scheme are available over a fixed six-year term.
Which businesses meet the “business in difficulty” criteria?
A business is considered in difficulty if it met any one of the following criteria on 31 December 2019:
- Individuals or companies that have entered into collective insolvency proceedings
- Limited companies which have accumulated losses greater than half of their share capital in their last annual accounts (this does not apply to SMEs less than three years old )
- Partnerships, limited partnerships or unlimited liability companies which have accumulated losses greater than half of their capital in their latest annual accounts (this does not apply to SMEs less than three years old)
- Where the undertaking has received rescue aid and has not yet reimbursed the loan or terminated the guarantee, or has received restructuring aid and is still subject to a restructuring plan
- A company which is not an SME where, for each of the last two accounting years, (i) its book debt to equity ratio has been greater than 7.5; and (ii) its EBITDA interest coverage ratio has been below 1.0.
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