Coronavirus Bounce Back Loan Scheme

A new loan scheme has been announced to help businesses rebuild once the current crisis ends. Called the Bounce Back Loan, this is a separate initiative to the previously announced Coronavirus Business Interruption Loan Scheme (CBILS). Whereas the previous scheme was intended to ease cashflow issues during the shutdown, the new scheme is aimed at giving businesses a hand in getting back to full operation once the shutdown ends.

At this early stage, the details on the scheme are minimal and we will be keeping an eye out for further updates in the near future. With an intended launch date of 4 May 2020, it is hoped that those will be available in the next few days. The current details of the scheme are as follows

• Loans will be for small and medium-sized businesses
• The available amounts will be from £2,000 to £50,000 but can only be up to 25% of turnover.
• Loan terms will be up to 6 years.
• There will be no fees or interest for the first 12 months. No repayments will be due for the same period.
• The government will provide 100% guarantees to the loans.

As well as being a small to medium sized business, applicants will also need to meet the following criteria.

• Be based in the UK
• Have been affected negatively by the coronavirus
• Not have been an “undertaking in difficulty” on 31 December 2019. This term has not been defined but is likely to involve checks that the business was viable before the outbreak.
• Not be any of the following
  • Bank
  • Insurer
  • Reinsurer
  • Public-sector body
  • Grant-funded further education establishment
  • State-funded primary or secondary school

It is hoped that this scheme will not be plagued by the same initial issues as the CBILS, where businesses found it hard to access funds at reasonable rates. Once we have more information, we will share it through this blog and our weekly webinars.