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Bounce Back Loan Scheme (BBLS) – A Quick Guide

An alternative to the Coronavirus Business Interruption Loan Scheme (CBILS), the Bounce Back Loan Scheme (BBLS) which launched on Monday (4 May 2020) offers hassle-free, government-backed loans of up to £50,000 to SMEs whose revenue is detrimentally affected by Covid-19.

Key Features

  • Loans of up to £50,000

The BBLS allows eligible companies to apply for loans of a minimum of £2,000 and maximum of the lower of 25% of a Company’s turnover and £50,000.

  • A set interest rate of 2.5% p.a.

The UK Government will pay the interest due for the first 12 months directly to the lender.

  • No repayments for the first 12 months
  • Fully guaranteed by the UK Government

This covers both the principal loan and interest.

  • 6-year term

The loan term is 6 years but borrowers are free to repay the loan in full or in part at any time.

Who is eligible?

Most trading businesses should qualify under the scheme which requires the applicant to self-certify the following:

  • That you are a UK-based business and were established before 1 March 2020

You must be engaged in trading or commercial activity in the UK.

  • That you have been adversely affected by Covid-19

You will also be asked to confirm that you were not a “business in difficulty” at 31 December 2019 (if you were, you will have to confirm that you comply with additional state aid rules).

  • That you have not applied for another Coronavirus loan scheme (such as CBILS)

This includes your business and any parent or subsidiary company.

  • That you are not in bankruptcy, liquidation or undergoing debt restructuring
  • That at least 50% of the income of your business comes from its trading activity

How to apply?

If you think that the BBLS is for you, visit the British Business Bank website and select an accredited lender (a list of which can be found here). You will then need to approach the lender directly, via its website,complete a short application and self-certify the criteria above.

If you meet the criteria, you will then be asked to complete standard Anti-Money Laundering (AML) and Know Your Customer (KYC) checks.

Within a few days, the lender should have made a decision on whether to offer you finance. If the lender turns down your application, you are free to apply to a different accredited lender.

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