It appears that some clients did not receive my email of Monday explaining the new initiative refereed as the “Bounce Back Loan Scheme (BBLS)”, which went live on Monday morning ( fast-track funding support for smaller businesses), if you missed my email I sent out on Monday, worry not as here it is to include the practical experience of the clients who have applied and also the benefit of hindsight.
The application process is very simple and once you log into your business account on the bank internet portal it will take less than 10 minutes to complete, it will ask you what your turnover was last year, or estimated turnover if you started business recently, and then ask how much you wish to borrow (see borrowing limits below), the rest of the questions are in a tick YES / NO format.
Key features of BBLS
- Apply for 25% of turnover up to a maximum of £50,000 (minimum £2000)
- Simple, seven-question application form
- If you’ve already taken out a CBIL up to £50,000, you can apply to switchover the BBLS
- The loans are backed by 100 per cent government guarantees
- The government will pay the interest for the first 12 months and no repayments will be made during this time
- BBLS are for up to six years
- There will be no early repayment fees or penalties
- There will be a flat rate of 2.5% Per Annum interest following the initial 12-month interest free period
The Scheme is open to most businesses, regardless of turnover, who meet the eligibility criteria and who were established on or before 1 March 2020. Borrowers are required to declare, amongst other things, that:
- It’s UK-based in its business activity, and established by 1 March 2020
- It’s been adversely impacted by the Coronavirus (Covid-19)
- It’s not currently using a government-backed Coronavirus Loan Scheme (unless using BBLS to refinance a whole facility)
- It’s not in bankruptcy, liquidation or undergoing debt restructuring
- It isn’t a bank, building society, insurance company, public sector organisation, state-funded primary or secondary school, or an individual other than a sole trader or a partner acting on behalf of a partnership.
- On 31 December 2019 the business was not a “business in difficulty”
- More than 50% of the income of the business (together with that of any member of any group of which it is a part) is derived from its trading activity
- It will use the loan only to provide economic benefit to the business, and not for personal purposes
How to apply
The application process is very simple and once you log onto your business account on the bank internet portal, complete the form.
It is cheap finance and definitely a lot cheaper than the normal bank lending, and if it turns out that once things get back to normal your business does not need this funding, you can repay without redemption penalty, it’s worth considering and applying for it as it won’t be available forever.
Let me know if you require any help
Stay safe and sane
The information contained in this article is for general information purposes only and does not constitute advice, Whilst we endeavour to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability for a particular purpose. We recommend that professional advise should be taken from a suitably qualified expert before undertaking any action.