New 100% government backed loan scheme for small business
Small business owners can get from £2,000 to £50,000 from the Government’s brand new Bounce Back Loans scheme.
The new scheme was announced by Chancellor Rishi Sunak on the 27 April 2020, adding to the existing support for small businesses currently affected by the coronavirus.
The Government is giving accredited lenders a 100% guarantee for the loans, and aiming to deliver loans through these lenders as quickly as possible;
- businesses will be able to borrow between £2,000 and £50,000 and access the cash within days
- loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form
Are the loans interest-free?
No, but you won’t pay any interest and you won’t have to make any repayments for the first 12 months.
There is no arrangement fee or early repayment charges to be payed– the Government will cover your fees and interest for the first 12 months.
The governments aim is for borrowers to pay a low standardised interest rate.
How long is the Bounce Back Loan Scheme available for?
The scheme is currently available until 4 November 2020, the Government has the option to extend this.
How do you apply for a Bounce Back Loan?
The scheme opened for applications on Monday 4 May 2020. To apply, head over to the British Business Bank website where you can find all the information regarding applying.
1. Find a lender
View and select a BBLS accredited lender
2. Approach a lender
The easiest and fastest way to approach your lender is via their website.
In the first instance, you should approach your own provider. You may also consider approaching other lenders if you are unable to access the finance you require.
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 the standard customer fraud, Anti-Money Laundering and Know Your Customer checks.
3. The lender will make their decision
It is at the lenders discretion whether they offer you finance or not.
Under the scheme, lenders are not permitted to:
- take any form of personal guarantee
- take recovery action over a borrower’s personal assets (such as their main home or personal vehicle)
4. What if my application is unsuccessful?
If one lender turns you down, you can still approach other lenders within the scheme.
BBLS is designed to be fast for lenders to process and quick and easy for businesses to access. To help achieve this, you will only be required to fill out a short application form online.
Accredited lenders list
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