The Bounce Back Loans Scheme (BBLS) is a 100% government-backed loan scheme available to most UK businesses, regardless of turnover. It was launched on 4th May, and is part of the UK government's package of measures to provide financial support to businesses that have been negatively impacted by the coronavirus pandemic.
Key features of BBLS:
- BBLS funding comes in the form of a term loan.
- The minimum amount you can apply for is £2,000. The maximum amount you can apply for is 25% of your turnover, capped at £50,000.
- The fixed repayment term for a Bounce Back loan is 10 years.
- There are no early repayment fees.
- The interest rate is fixed at 2.5% per annum and the loan will be interest free for the first 12 months.
- An automatic 12-month repayment holiday is applied at the start of the loan term, meaning no payments are required for the first year.
- No personal guarantees are needed.
- There are no arrangement fees to be paid with a Bounce Back loan.
- It's important to note that the borrower is fully liable for the debt.
- 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.
Is my business eligible for a BBLS loan?
To qualify for a Bounce Back loan, your business must:
- be based in the UK
- be established on or before 1st March 2020.
You must also:
- self-certify that the business has been negatively impacted by the Covid-19 pandemic
- confirm that the business hasn't already taken out another government-backed loan scheme (unless you're using a Bounce Back loan to refinance the existing facility in full)
- confirm that the business is not undergoing liquidation, bankruptcy or debt restructuring.
How can I apply for a BBLS loan?
You can apply via a simple form directly with one of the BBLS accredited lenders. The scheme has been set up specifically to allow businesses access to funding quickly, so funds should be with you within a matter of days.
Can I apply for BBLS if I already have a CBILS loan?
You can't have a Bounce Back loan and a CBILS loan at the same time. However, you can take out a BBLS loan to refinance your CBILS loan. Similarly, if you already have a Bounce Back loan but need more finance, you can apply for a CBILS loan to refinance the full amount of your Bounce Back loan.
Should I apply for BBLS or CBILS?
Whilst Bounce Back loan facilities are restricted to term loans up to £50,000, CBILS facilities include a range of products, including asset finance, overdrafts and invoice financing of up to £5 million in value.
If you're looking for a term loan of £50,000 or under, with no personal guarantee taken, a Bounce Back loan may be a good fit. However, if you need over £50,000 and want the option of asset finance or other loan facilities, a CBILS product may suit you better, though the lender may take a personal guarantees or security if you're borrowing over £250,000.
What other support can my business access?
BBLS is part of a larger package of measures introduced by government to support UK businesses. We've written an article which lists all of the current government schemes available to UK businesses, along with a quick look at the financial support available from banks too.
If you need support in the form of business guidance and advice, there are several online resources set up specifically to help you manage your business through the pandemic. It's worth bookmarking our dedicated coronavirus business advice hub, which features articles from experts covering how to keep your business afloat during this time.