What is it?

The Bounce Back Loan Scheme (BBLS), provides financial support to small businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

Small firms will be able to access to 100% government backed loans. The new scheme has been announced due to the slow access to existing COVID-19 rescue schemes, most noticeably CBILS. Finance should now be accessible within days of applying.

When is it available?

The scheme opened on Monday 4^th May 2020.

How much can I apply for?

Businesses can apply for a minimum of £2,000 up to 25% of previous year’s turnover, which is capped at a maximum of £50,000.

The borrower remains 100% liable for the debt.

Do BBLS require security?

Lenders are not permitted to take personal guarantees or take recovery action over a borrower’s personal assets.

What are the terms of the loans?

It is a 100% government backed guarantee with term length of up to 6 years. There are no capital or interest repayments within the first 12 months.

The government will make payments to cover the first 12 months of interest and the borrower will not have to make any repayments for the first 12 months.

Early repayment is permitted without any early repayment charges.

The interest rate for the BBLS is set at 2.5% per annum.

Who is eligible?

All businesses from any sector can apply, if want a small loan quickly the BBLS might be more preferable than CBILS.

Businesses that cannot apply are:

– Banks, insurers and reinsurers (but not insurance brokers)

– Public sector bodies

– State funded primary and secondary schools

Only businesses that existed on 1^st March 2020 can apply.

How do I apply?

The BBLS requires filing in a two-page self-certification from online. Only basic details are required to ensure the company exist and is eligible.

There are 11 lenders participating currently (including many of the main banks). It is recommended that you apply to your business’s current bank initially.

Business owners/directors will self-certify that the information provided is correct and the lender will decide whether to approve finance or not.

What if I have taken a loan under the CBILS facility?

If you have already received finance of up to £50,000 under the existing loans schemes (i.e. CBILS), you can transfer these to the BBLS. You will have until 4 November 2020 to arrange this with your lender.

Main difference between BBLS and CBILS

BBLS loans are 100% government-backed loans compared to CBILS which is 80%.

The BBLS loans will be available to smaller firms up to a maximum of £50,000. CBILS loans are for firms seeking finance between £25k and £5m.

The BBLS requires filing in a two-page self-certification from online, compared to CBILS where a normal commercial loan application needs to be completed, CBILS applications have to go through to critique of the lenders, which is currently causing delays.

Unlike CBILS, the banks will not have any risk relating to BBLS loans, this will enable quicker decisions and necessary funding to smaller businesses as soon as possible.

Updated 11 May 2020