The Bounce Back Loan Scheme announced this week by the Chancellor, is a new micro loan scheme aiming to provide a simple, quick, easy solution for those in need of smaller loans.
The Bounce Back Loan scheme will offer:
- loans from £2,000 to £50,000, capped at 25% of turnover;
- interest for the first 12 months will be covered by the government;
- there will be no fees;
- the government will provide lenders with a 100% guarantee;
- the government will work with lenders to agree a low rate of interest for the remaining period of the loan;
- loan terms will be up to 6 years; and
- no repayments will be due during the first 12 months.
The Chancellor has stated that the application process will be a simple, quick, standard form for businesses to fill in with no forward-looking tests of business viability or complex eligibility criteria and that most loans will arrive within 24 hours of approval.
The scheme will be delivered through a network of accredited lenders, and you can apply for a loan if your business:
- is based in the UK;
- has been negatively affected by Coronavirus; and
- was not an ‘undertaking in difficulty’ on 31st December 2019.
You cannot apply if you have already received a loan via CBILS, however if you have 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 04 November 2020.
The scheme will launch Monday 4 May 2020 and further details of the application process will follow in due course.