Bounce Back Loan Scheme (BBLS)
The Bounce Back Loans scheme (BBLS) will allow small businesses to borrow up to 25 per cent of their turnover, up to a maximum of £50,000.
The BBLS will be 100 per cent backed by a Government guarantee, unlike the Coronavirus Business Interruption Loan scheme (CBILS) and will offer an interest-free period for 12 months.
Businesses won’t pay any fees and no repayments will be due during the first 12 months.
The loans will be provided by a network of accredited lenders, similar to CBILS, which means some loan agreements may vary, but the Government level of fixed interest at 2.5 per cent for the remaining period of the loan (loan terms will be up to six years).
The BBLS is open to businesses from most sectors and those applying must be able to self-certify the following to lenders:
- It is UK-based in its business activity and established by 1 March 2020;
- It has been adversely impacted by the Coronavirus (Covid-19);
- It is not currently using a government-backed Coronavirus loan scheme (unless using BBLS to refinance a whole facility);
- It was not a business in difficulty at 31 December 2019; and
- It is not in bankruptcy, liquidation or undergoing debt restructuring.
Some organisations are excluded from BBLS finance, this includes:
- Credit institutions (falling within the remit of the Bank Recovery and Resolution Directive)
- Public sector bodies,
- State-funded primary or secondary schools
- Insurance companies.
No – You cannot apply if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). However, if you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.
Once a business has selected an accredited lender via the British Business Bank website here, they will be required to fill in a short online application form on their chosen lender’s website.
This self-certifies that they are eligible for a Bounce Back Loan facility. The bank will then undertake standard customer fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks.
If the bank is satisfied that the borrower meets the conditions of the BBLS then they should be able to release funds within a matter of days – in some cases within 24 hours.