6 May 2021
We are reporting that Bounce Back Loan Scheme was announced last week, which leads to greater business access to such government support.
We summarized all the necessary information to get this support, which is below:
Key points of Bounce Back Loan Scheme (BBLS)
1. What is the essence of the scheme?
The main idea is to support small firms. Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders.
Your business will remain liable for repayment of the loan.
2. Who can apply? You must be able to self‑declare to the lender that:
you must be UK based;
you have been impacted by the COVID-19 pandemic;
you were not a business in difficulty at 31 December 2019;
you are engaged in trading or commercial activity in the UK and were established by 1 March 2020;
you are not using the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) or the Bank of England’s Covid Corporate Financing Facility Scheme (CCFF). But you can replace the CBILS, CLBILS or CCFF facility with BBLS;
you are not in bankruptcy or liquidation or undergoing debt restructuring;
you are not in a restricted sector (credit institutions; insurance companies; public-sector organisations; schools).
The criteria are slightly different depending on the lender.
3. What are the loan limits? The loan limits under BBLS are a minimum of £2,000 and a maximum of £50,000. You will be able to get loans worth up to 25% of your turnover.
4. What is the interest rate? The Government will make a business interruption payment to cover the first 12 months of interest payments and any lender-levied charges. You do not have to make any repayments for the first 12 months. After the first year, the interest rate for the facility is set at 2.5% per annum, meaning businesses will all benefit from the same, affordable rate of interest.
5. What are finance terms? The length of the loan is 6 years but early repayment is allowed, without early repayment fees. 6. What is the interest rate?
The Government will make a business interruption payment to cover the first 12 months of interest payments and any lender-levied charges. You do not have to make any repayments for the first 12 months.
7. Example
If your annual turnover is £100,000, you could borrow £25,000 over 72 months with the first 12 month repayments of £0 and 60 monthly capital repayments of £416.67. Interest is charged each month against the amount outstanding at an annual interest rate of 2.5%. This means the first payment of capital and interest would be £469 at month 13. Total amount repayable by you will be £26,589.
Application process
1. Action plan.
Find a lender;
Approach a lender;
Lender makes a decision;
If one lender turns you down, you can still approach other lenders within the scheme.
The BBLS is able to apply from Monday 4th May. The funds should be available within 24 hours of approval. However, due to the large number of applications, application processing may take longer.
3. Lenders. The following lenders are accredited:
Accredited lenders | Conditions | Application page |
BANK OF SCOTLAND | General conditions. + you must be using your Bank of Scotland Business Current Account as your main business account.
Required information: - Permission to apply for loan from all other account holders. - Registration number. - Your business account number and sort code. - Estimated annual turnover. | |
BARCLAYS | General conditions. | The quickest way to apply is in Online Banking https://bank.barclays.co.uk/olb/authlogin/loginAppContainer.do#/identification If you haven’t registered for Online Business Banking, you can https://www.apply.barclays.co.uk/forms/uk-retail-bbr?execution=e1s1 |
CLYDESDALE AND YORKSHIRE BANKS | General conditions. + you must be using your Clydesdale Bank account as your main business account. | |
DANSKE BANK (NORTHERN IRELAND) | General conditions. | |
HSBC | General conditions. | |
LLOYDS BANK | General conditions. + you must be using your Lloyds Bank Business Current Account as your main business account.
Required information: - Permission to apply for loan from all other account holders. - Registration number. - Your business account number and sort code. - Estimated annual turnover. | |
NATWEST | General conditions. | |
SANTANDER | General conditions. + you must be using your Santander Account.
Required information: - Company name, address and company registration number; - Turnover for 2019 (estimates can be used); - Santander business current account and sort code | |
THE ROYAL BANK OF SCOTLAND | General conditions. + you must be using your the Royal Bank Of Scotland account. | |
TSB | General conditions. + you must be using your TSB Account. | |
ULSTER BANK (NORTHERN RELAND) | General conditions. |
More detailed information regarding CBILS, CCFF scheme and other measures due to COVID-19 visit our Linkedin page https://www.linkedin.com/company/lexefiscal/ .
If you have any current issues you would like to discuss, you can contact
Mikita Makayou at mikita@lexefiscal.com, or
Dr. Frank at clifford.frank@lexefiscal.com.