The government’s Bounce Back Loan Scheme (BBLS) is going well and if you haven’t already applied and you are eligible (which most of you are) – you should do!
We’ve all been impacted by Covid-19 and the damage to economies has rapidly shifted from disruptive – to damaging – to severe across the World. So whilst many businesses have good cash reserves and strong balance sheets – access to additional funds at no cost for the first 12 months we feel is a good move – even if you stick it on deposit for 12 months and repay.
If you do need the money (and many of us will), you will have 6 years to repay at just 2.5% interest rate and there is no interest charge in the first year and you do not make repayments in the first year.
Delegated to the main clearing banks to implement from 9 am Monday 4th May – by yesterday evening the banks had processed in the region of 100,000 BBLS applications.
With payment promoted as being received within 24 hours of application – many business owners will be watching their on-line bank statements today with interest.
The demand for the scheme comes as no surprise. Whilst access to the 80% government loan guaranteed Coronavirus Business Interruption Scheme (CBILS) is proving relatively tricky – the new Bounce Back Loan Scheme is very simple to access and apply for.
You are eligible for the BBLS if:
- you are a small or medium sized company, partnership or sole traders
- you are based in the UK
- you have been negatively affected by coronavirus (who hasn’t)
- you were not an ‘undertaking in difficulty’ on 31 December 2019
If you are eligible then:
- You can apply for a loan up to 25% of turnover but not more than £50,000 (for groups you could make several claims)
- 100% Government loan guarantee to the bank processing your application (there are no hidden guarantees although unincorporated businesses are by their very nature exposed to unlimited liability)
- There are no forward tests of business viability
- There is no complex eligibility criteria
- Simple two page two-page self-certification form online to complete (three steps that take less than 30 minutes)
- Loans should arrive within 24 hours of approval
- No loan repayment in the first 12 months
- First 12 months interest free
- No set up charges – theses will be paid by the Government
To start the process you simply go on-line to your business bankers website – who are all set up to process your application rapidly.
Groups can claim for each trading subsidiary and there are special rules for the holding company in terms of eligible turnover to calculate what you could apply for.
It’s a great deal. If you need help or just want to discuss please give us a call.