Bounce Back Loan Scheme – Updated 12/05/2020
The Bounce Back Loan Scheme enables businesses to obtain a six-year term loan at a government set interest rate of 2.5% a year. The government will cover interest payable in the first year.
- Up to £50,000 loan: Loans will be from £2,000 up to 25% of a business’ turnover or £50,000, whichever is lower.
- 100% guarantee: The scheme provides the lender with a government-backed, full guarantee (100%) against the outstanding facility balance, both capital and interest. The borrower always remains 100% liable for the debt.
- Interest rate: The government has set the interest rate for this facility at 2.5% per annum, meaning businesses will all benefit from the same, low rate of interest.
- Interest paid by government for 12 months: The government will make a Business Interruption Payment to the lenders to cover the first 12 months of interest payable, so businesses will benefit from no upfront costs.
- No principal repayments for first 12 months: Borrowers will not have to begin principal repayments for the first 12 months, thereafter capital will be repaid on a straight-line basis.
- No guarantee fee for businesses or lenders to access the scheme
- Finance terms: The length of the loan is for six years but early repayment is allowed, without early repayment fees.
- No personal guarantees: No personal guarantees are allowed, and no recovery action can be taken over a principal private residence or principal private vehicle.
The SME FAQs page on the BBB website, outlines the differences between this new scheme and the CBILS initiative alongside further information about eligibility and how to apply.
Applications for BBLS should directly go through the major high street banks.
If you don’t bank with one of the main banks any of the banks above should consider your application. (*These lenders are regional not nationwide)
Update – Having worked through each provider most of them expect you to have or apply for a current account with them.
If you have a personal account with one of the banks listed it could be worth using that bank to apply – Althought the forms ask for your business bank details with that bank, they might accept personal bank details.
HSBC will open a feeder account for the loan, this can take up to 5 days, further updates on this to follow.
An HSBC customer I know of is now 8 days into the wait time for the loan and has heard nothing from them. NatWest seem able to turn things around much faster.