A new Bounce Back Loan Scheme launched on 4 May 2020 to provide small businesses with loans of between £2,000 and £50,000. A lender can provide a six-year term loan from £2,000 up to 25% of a business’ turnover. The maximum loan amount is £50,000.
The scheme is 100% backed by the government and there will be no fees or interest to pay during the first 12 months.
It has also been agreed with lenders that following the initial 12-month period, loans will be charged at a flat rate of 2.5% interest.
Any UK business which has been negatively impacted by the coronavirus and was not classed as an ‘undertaking in difficulty’ as of 31 December 2019, will be eligible for the scheme.
The length of the loan is six years but early repayment is allowed, without early repayment fees.
Lenders are not allowed to take personal guarantees or take recovery action over a borrower’s personal assets (such as their main home or personal vehicle).
Applications for the loan scheme can be made online from 4 May 2020 via accredited lenders and the funds are expected to be made available to businesses within a few days of their application.
You cannot apply under this scheme if you are already claiming funds under the Coronavirus Business Interruption Loan Scheme, however you may apply to transfer your loan to the Bounce Back Loan Scheme. This can be arranged with your lender up until 4 November 2020.
More information on how to apply for a Bounce Back Loan can be found here.
For further guidance on the financial support available to you contact Backhouse Jones on 01254 828300.