08 May Coronavirus bounce back loans (BBLS)
The scheme was launched on 4 May 2020 and will help small and medium-sized businesses affected by coronavirus (Covid-19) to apply for a minimum loan from between £2,000 to £50,000 so long as the loan is no more than 25% of annual turnover.
These loans will be guaranteed 100% by the government and there will be no fees or interest to pay for the first 12 months and will not incur any set-up fees.
The loan terms will be up to 6 years with no repayments due in the first 12 months. 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.
Your business must be able to self‑declare to the lender that it:Your business must be able to self‑declare to the lender that it:
- has been impacted by the coronavirus (COVID-19) pandemic
- was not a business in difficulty at 31 December 2019 (if it was, you must confirm your business complies with additional state aid restrictions under de minimis state aid rules)
- is engaged in trading or commercial activity in the UK and was established by 1 March 2020
- is 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), unless the Bounce Back Loan will refinance the whole of the CBILS, CLBILS or CCFF facility
- is not in bankruptcy or liquidation or undergoing debt restructuring at the time it submits its application for finance
- derives more than 50% of its income from its trading activity (this requirement does not apply to charities or further-education colleges)
- is not in a restricted sector (see below)
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
Coronavirus business interruption loan scheme (CBILS)
You cannot apply for coronavirus bounce back loans if are already claiming under the CBILS scheme. 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, this can be arranged with your lender.
How to apply
The scheme will be delivered through accredited lenders who can be found through the British Business Bank Website
The lender has the authority to decide whether to offer you finance.
Under the scheme, lenders are not permitted to:
- take any form of personal guarantee
- take recovery action over a borrower’s personal assets (such as their main home or personal vehicle)
If one lender turns you down, you can still approach other lenders within the scheme.
BBLS is designed to be fast for lenders to process and quick and easy for businesses to access. To help achieve this, you will only be required to fill out a short application form online.
The borrower always remains fully liable for the debt.