This week Rishi Sunak announced a new loan, the “Bounce Back Loan”. Sunak said that the loan would help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.
The scheme is not available yet. It should launch on the 4th May but it seems that the details are still being agreed. The loan is designed to help small and medium sized businesses to borrow between £2,000-£50,000. Access to the cash will supposedly be within days.
The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. Lenders have been accused of dragging their heels on CBILS and being too slow to distribute the loans, which are 80% backed by the government.
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.
Bounce back loan Eligibility
You can apply for a loan if your business:
- is based in the UK
- has been negatively affected by coronavirus
- was not an ‘undertaking in difficulty’ on 31 December 2019
Who cannot apply
The following businesses are not eligible to apply:
- banks, insurers and reinsurers (but not insurance brokers)
- public-sector bodies
- state-funded primary and secondary schools
- if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).
If you have already started a CBILS application or 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.
More information will hopefully be available soon. If you have any questions about the bounce back loan let us know.