Details of the recently reported new loan scheme have been released as follows.
The Bounce Back Loan scheme will help small and medium-sized businesses to borrow between £2,000 and £50,000.
The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.
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.
The scheme will be delivered through a network of accredited lenders. So your first port of call will be your own bank.
When will this be available?
It will launch on 4 May 2020.
You can apply for a loan if your business:
- is based in the UK
- has been negatively affected by coronavirus
- was not in financial difficulty as at 31 December 2019
If you’re already claiming funding
You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).
If you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.
What information will I need to provide to the lender?
Details on this are awaited, but the Chancellor has said this will be much reduced compared with a normal loan application. It is expected to be a simplified process.
There has also been a relaxation to the information required for the existing Coronavirus Business Interruption Loan Scheme.
To speed up the provision of finance to small and medium-sized businesses under CBILS, the largest seven SME lenders (Barclays Bank UK, Danske Bank, HSBC, Lloyds Bank, NatWest, Santander and Virgin Money) have stated that rather than relying on businesses providing forecasts and business plans in applications, lenders will use their own information.
29 April 2020