The Small Business Bounce Back Loan is quick and easy to access, and has been launched to support small businesses which are struggling due to coronavirus. The good news is that thousands of small firms and sole traders are eligible– including hairdressers, coffee shops and florists.
You can now apply for the 100% state-backed loan worth up to £50,000. No interest charged or repayments needed in the first 12 months. The interest rate for this loan will then be 2.5% per annum and the repayment term is fixed at six years.
The Government will cover any interest payable in the first 12 months through a Business Interruption Payment to the lender, and lenders will benefit from a 100% government-backed guarantee.
Read below for more info on the scheme. We hope it makes it all crystal clear.
The scheme is open to most businesses, regardless of turnover, who meet the eligibility criteria and who were established on or before 1 March 2020. There a few things which you must check to be eligible for the loan you must also:
The scheme is available through the British Business Bank’s accredited lenders. A list of lenders is available here.
Expect to fill in a short online application form to self-declare that you are eligible for the Scheme.
You should firstly approach your own Bounce Back Loan Scheme accredited provider. Though if you are unable to access the finance you need, or your existing provider is not accredited to provide the loan, then you can consider approaching others.
The scheme is only supposed to be temporary and to help people through this current and difficult period. So, it will only initially open until 4 November 2020, with the government retaining the right to extend this.
You can apply for between £2,000 up to 25% of their turnover. The maximum loan available under the Scheme is £50,000.
And remember, businesses remain 100% liable to repay the full loan amount, as well as interest, after the first year.
The aim of the scheme is to allow businesses to access finance quickly. The online application form is expected to be assessed within days.
Though just a heads up, the lender may ask you for additional information, such as an HMRC self-assessment tax return. Remember, applications from eligible borrowers will be subject to customer fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks.
You must confirm to your chosen lender that the loan will only be used to provide an economic benefit to the business. For example, this would include providing working capital, and not for personal purposes.
If the business was a “business in difficulty” on 31 December 2019, then a loan under the scheme is not permitted to be used for export-related activities.
There are no limits on the amount of the facility that can be used for refinancing.
If you’re thinking about applying for the loan then we hope that you receive the help that you need. Our team is on-hand if we can provide you with any help or assistance at all. Get in touch today for a free no-obligation quote!
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