The UK Government has now launched a dedicated website for the Covid-19 Bounce Back Loan.
Today (April 27), the chancellor Rishi Sunak announced another support option for businesses impacted by Covid-19, known as the ‘bounce back loan’.
The loans will be 100% underwritten by the Government, and are available for amounts under £50,000. The maximum which can be claimed by a company or sole trader is 25% of their turnover.
The government will cover interest and fees for the first year, with firms expected to repay the loans for five years after that. They are open to any business which was trading on 1 March, and the scheme will require banks to carry out only minimal checks to reduce administration. There is also no requirement for credit checks and no investigations to ensure that a business is financially viable.
Applications will launch at 9am on Monday 4 May, and the loans will be through accredited lenders of the British Business Bank.
The loans will have “no forward-looking test of business viability, no complex eligibility criteria, just a simple, quick standard form for businesses to fill in”. Eligible firms are expected to get funding within 24 hours of applying.
You can apply for a loan if your business:
- is based in the UK
- has been negatively affected by coronavirus
- was not an ‘undertaking in difficulty’ on 31 December 2019
Who cannot apply
The following businesses are not eligible to apply:
- banks, insurers and reinsurers (but not insurance brokers)
- public-sector bodies
- further-education establishments, if they are grant-funded
- state-funded primary and secondary schools
If you’re already claiming funding
You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS) – however you can transfer CBILS lending to this new scheme.
Sources / further reading
- Guardian – 27 April 2020 – Sunak backs down and offers small firms 100% loan guarantees
- Forbes – 28 April 2020 – Bounce Back Loans Look Too Good To Miss
- SmallBusiness.co.uk – 28 April 2020 – Microbusiness £50,000 Bounce Back Loans – how they work
- UK Gov – 27/28/29 April 2020 – Bounce Back Loans