Bounce Back Loans Scheme: key points you need to know

The Bounce Back Loans Scheme (BBLS) is a part of the government’s overall support package for UK businesses affected by Covid-19, which was open for application from yesterday, 4 May.

Some key points about the scheme

• 100% government guaranteed
• Quick application process (the money will arrive within days)
• No interest, fees or repayments for the first 12 months
• Early repayment allowed with no fees

How much can you borrow?

A lender can provide loans from £2,000 up to 25% of a business’s turnover. The maximum loan amount is £50,000. 

Are you eligible to access BBLS?

Designed specifically to help UK businesses that are losing revenue and seeing a disruption in their cash flow as a direct result of the Coronavirus outbreak, BBLS has certain eligibility requirements from borrowers. In direct quote from the British Business Bank:

Your business must be able to self‑declare to the lender that it:

• has been impacted by the coronavirus (COVID-19) 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 using the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) or the Bank of England’s Covid Corporate Financing Facility Scheme (CCFF), 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)
• is not in a restricted sector (see below)

How do you access BBLS?

BBLS is delivered by the British Business Bank, through a number of accredited lenders across the country. You can view and select from a full list of current BBLS accredited lender here.

As a first step, you should approach your own bank or finance provider. Assessment to approve loans is done by each lender who will decide whether or not to offer you finance. However, if you are rejected by one lender, you can still approach other lenders within the scheme.

Need help? Get complimentary advice from DTE Corporate Finance

At DTE we are committed to being your partner for success in both good times and challenging times. To help you navigate through the current challenges caused by Covid-19, our Corporate Finance team currently offers complimentary support for all businesses that need advice to access the most suitable type of funding for them.

Book a 20 minute call with our Corporate Finance Directors Matt Beckley or Andy Humphrey today for complimentary advice with your funding needs by clicking on the button below.