Bounce Back Loan Scheme (BBLS)

Published by John Walsham on 4 May 2020

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Last updated 4 May 2020

The Bounce Back Loan Scheme (BBLS) is now open for applications and aimed at supporting small and medium enterprises affected by COVID-19 with Government backed loans of up to £50,000.

Main Bounce Back Loan Scheme features

  • Up to £50,000 loan: Loans will be from £2,000 up to 25% of a business’ turnover or £50,000, whichever is lower.
  • 100% guarantee: The scheme provides the lender with a government-backed, full guarantee (100%) against the outstanding facility balance, both capital and interest. The borrower always remains 100% liable for the debt
  • Interest rate: The Government has set the interest rate for this facility at 2.5% per annum, meaning businesses will all benefit from the same, low rate of interest.
  • Interest paid by Government for 12 months: The Government will make a Business Interruption Payment to the lenders to cover the first 12 months of interest payable, so businesses will benefit from no upfront costs.
  • No principal repayments for first 12 months: Borrowers will not have to begin principal repayments for the first 12 months, thereafter capital will be repaid on a straight-line basis.
  • No guarantee fee for businesses or lenders to access the scheme
  • Finance terms: The length of the loan is for six years but early repayment is allowed, without early repayment fees.
  • No personal guarantees: No personal guarantees are allowed, and no recovery action can be taken over a principal private residence or principal private vehicle.

Bounce Back Loan Scheme eligibility criteria

Businesses from all sectors can apply for a facility with few exceptions. The business must self-certify to its lender the following:

  • Confirm it is UK-based in its business activity, and established by 1 March 2020
  • Confirm it has been adversely impacted by the Coronavirus (COVID-19)
  • Confirm it is not currently using a government-backed Coronavirus loan scheme (unless using BBLS to refinance a whole facility)
  • Confirm it is not in bankruptcy, liquidation or undergoing debt restructuring

How to apply

  • Businesses should check the British Business Bank website to find out which lenders provide Bounce Back Loans.
  • Businesses will be required to fill in a short online application form on their lender’s website, which self-certifies whether they are eligible for a Bounce Back Loan facility. Eligible companies will be subject to standard customer fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks. Some State aid restrictions may apply to applications.
  • A list of BBLS accredited lenders can be found on the British Business Bank website.

Read more on our Bounce Back Loan Scheme Q&A article here.

If you would like to discuss eligibility for this loan, do speak with your usual Kreston Reeves contact, or John Walsham.

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