COVID-19: The Bounce Back Loan Scheme Opens for Applications
07 May 2020
The Bounce Back Loan Scheme is now open for applications.
This scheme is targeted at small and micro businesses which have been adversely impacted by the Coronavirus and are not currently using a government-backed Coronavirus loan scheme (unless the Bounce Back Loan will refinance the whole of the existing facility).
The key features of the scheme are set out below:
- Loans range from a minimum of £2,000 up to 25% of a business’ turnover, subject to a maximum amount of £50,000.
- The lender is provided with a 100% government-backed guarantee against the outstanding balance (both capital and interest). However, for the avoidance of doubt, the borrower remains 100% liable for the debt.
- The interest rate is set at 2.5% per annum and the Government will cover the first 12 months’ interest by way of a Business Interruption Payment.
- There is no fee for either lenders or businesses to access the scheme.
- The borrower does not have to begin principal repayments of the facility until after the first 12 months.
- The term of the loan is six years, but early repayment is allowed, without early repayment fees.
- Lenders are not permitted to take personal guarantees as security for the loan or to take any recovery action over a borrower’s personal assets, such as their home or personal vehicle.
Further information about the scheme, including eligibility criteria, participating lenders and how to apply, has been published on the British Business Bank’s website and is available at the following link:
If you have any queries in relation to the Bounce Back Loan Scheme or the other financial support options available to businesses at this time, please feel free to contact a member of the Banking team.