Coronavirus Bounce Back Loans – Available from 4 May 2020
Rishi Sunak has announced further support for SME’s with the creation of the ‘Bounce Back’ loan facility. Loans of between £2,000 and £50,000 will be made available to SME’s and supported by a 100% government guarantee.
Dated: 28 April 2020 Author: Richard McNeilly, Managing Partner
The simplified loan process is available from 4 May and will not be subject to the complex viability assessment used with other Coronavirus Business Interruption Loan Scheme (CBILS) facilities.
Loans will be free from capital repayments, loan interest and fees for the first 12 months and are repayable over a maximum period of 6 years.
It is expected that loans will be provided by loan providers accredited by the British Business Bank, although further details are awaited.
Whilst eligibility criteria have been simplified, it is important to note that facilities are capped at 25% of annual turnover for loan applicants.
Please note that if you are already claiming under the CBILS facility then you cannot apply for a bounce back loan. However, if your CBILS loan is under £50,000 you are able to transfer it to a bounce back loan with your lender until 4 November 2020.
Richard McNeilly, Managing Partner said “We have been lobbying government for this type of support, alongside our colleagues within UK200 group. Together we represent over 150,000 SME’s and in the Midlands, one third of businesses have reported that they are unlikely to trade through the disruption without an immediate injection of cash. ‘Bounce Back’ loans could be transformational for businesses who might otherwise have been declined support, but applicants should understand that this is not a grant – loans still need to be repaid”.
Further information can be found here.
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