Bounce Back Loans Scheme Launches to Help Small Firms

Bounce Back Loans Scheme Launches to Help Small Firms
Last month Chancellor Rishi Sunak announced the scheme for coronavirus-hit small businesses to borrow up to £50,000. Chancellor Rishi Sunak’s new “quick and easy” loan scheme for coronavirus-hit small businesses has launched today.

The new scheme, dubbed Bounce Back Loans, offers smaller amounts than the existing Coronavirus Business Interruption Loan Scheme (CBILS). Businesses will be able to apply for loans of up to £50,000.

The Treasury says they will be quicker and easier to apply for and will have a 2.5% interest rate.

The form will be seven questions long and the loan is 100% guaranteed by the government.

Loans are available to firms in all nations and regions of the UK.

One firm that has already applied is commercial office agency

Jonathan Ratcliffe, from commercial office agency, said: “I’d never have thought we’d be forced to take out a business loan, but sadly the time has come – income has stopped, and cash reserves will eventually run out. The uncertainty means we need cash now to cover the worst-case scenario – and after all this I’m not leaving anything to chance again. The process was a little confusing – I started at but then was bounced to British Business Bank.”

“What is not clear is that the loans may well be backed by the Government, but they are administered by high street banks. You would be better to go to your bank directly to start the loan process.

“Once we started the process with Santander (our bank) things were very simple – the only research I needed to do was work out our turnover in the last financial year – and input around five pieces of information such as company number, address, turnover, bank sort/account details and of course how much we needed to borrow – honestly is was very easy indeed.

“The Bounce Bank loan is great from our point of view. The process extremely easy, early repayments are accepted, so hopefully things don’t get too bad and you can repay the loan early. My worry is that things drag on and we eat into the loan – but we have no choice. My advice is just go to your business bank directly.”

You can apply for a loan if your business:

> is based in the UK
> has been negatively affected by coronavirus
> was not an ‘undertaking in difficulty’ on 31 December 2019

The following businesses are not eligible to apply:

> banks, insurers and reinsurers (but not insurance brokers)
> public-sector bodies
> state-funded primary and secondary schools
> If you’re already claiming funding

You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). 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.

There is more on the loans and how to apply here.

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