This week has seen the launch of the Government’s latest support package aimed at micro businesses and smaller SME’s.
Named the Bounce Back Loan Scheme (“BBLS”), it offers funding from £2,000 up to £50,000 and is backed 100% by a Government guarantee.
The terms of the loan are very attractive:–
- The capital will be repayable over a 5-year term (6-year loan with first 12-months enjoying a capital repayment holiday).
- The Government picks up the interest for the first 12 months.
- The interest rate is fixed at 2.5% for the term of the loan.
- No arrangement fees and no early redemption penalties.
- You can borrow up to 25% of your business’s turnover in the calendar year 2019 up to a maximum of £50,000.
- Funds are released within 24 hours of the BBLS being approved.
You can apply if your business is based in the UK and you have been negatively impacted by the Coronavirus. Applications are made online and take no more than 15 minutes.
There are a limited number of businesses that are ineligible, these include: banks, insurers and reinsurers (but not insurance brokers), public sector bodies, and state funded primary and secondary schools.
The BBLS is administered by The British Business Bank on behalf of the Government and funds advanced by a range of banks. For more details you can visit the website.
Applicants should generally apply for a BBLS through their main bank, as applications are routed through their online banking service.
The BBLS will provide much needed cash for the smaller end of UK business market and delivered through a slick automated process.
It is worth noting, however, that if you borrow under BBLs you remain liable for 100% of the loan.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.