• Bounce Back Loan Scheme
Bounce Back Loan Scheme (BBLS)
What is it?
The Bounce Back Loans scheme will offer loans from £2,000 up to 25% of a business’ turnover or £50,000, whichever is lower. The Government will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. The government has then set the interest rate for this facility at 2.5% per annum for subsequent years. No repayments will be due during the first 12 months. Length of the loan is for six years. There will be a short, standardised online application to apply for a loan. The scheme is now open for applications and firms will be able to access these loans through a network of accredited lenders.
Am I eligible?
Your business must be able to self‑declare to the lender that it:
- has been impacted by the Coronavirus pandemic.
- was not a business in difficulty at 31 December 2019 (if it was, you must confirm your business complies with additional state aid restrictions under de minimis state aid rules).
- is engaged in trading or commercial activity in the UK and was established by 1 March 2020.
- is not currently using a government-backed Coronavirus loan scheme, unless the Bounce Back Loan will refinance the whole of the CBILS, CLBILS or CCFF facility.
- is not in bankruptcy or liquidation or undergoing debt restructuring at the time it submits its application for finance.
- derives more than 50% of its income from its trading activity (this requirement does not apply to charities or further-education colleges).
Bounce Back Loans are available to businesses in all sectors, except the following:
- Credit institutions (falling within the remit of the Bank Recovery and Resolution Directive)
- Insurance companies
- Public-sector organisations
- State-funded primary and secondary schools
The borrower remains fully liable for the debt.
What do I need to do to access it?
You will need to fill in a short application form online, which self-certifies that your business is eligible for a loan under BBLS. If your business is eligible, it will be subject to appropriate customer fraud, Anti-Money Laundering and Know Your Customer checks. Some state aid restrictions may apply to your application.
Who do I need to speak to?
You should speak to your business banking provider or one of the accredited lenders. With high demand for BBLS facilities, finance providers recommend that you approach a lender via their website. Phone lines are likely to be busy and branches may not be able to handle enquiries in person.
- 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.
OTHER BUSINESS FINANCE SUPPORT OPTIONS You can also find details of other government measures to support public services, people and businesses through this disruption on the Government’s Business Support website. GUIDANCE AND SUPPORT FOR YOUR BUSINESS DURING THIS PERIOD OF UNCERTAINTY The British Business Bank and The Institute of Chartered Accountants in England and Wales (ICAEW) have created new content to help businesses that are facing financial and operational challenges as a result of the coronavirus outbreak. You can view this regularly updated guidance at the Business Finance Guide website.