Bounce Back Loan Scheme

The update delivered by Chancellor Rishi Sunak on 27 April brought the announcement of an additional loan scheme aimed at small businesses affected by the coronavirus. The Bounce Back loan scheme will launch on 4 May and enables eligible companies to borrow between £2,000 and £50,000 (up to a maximum of 25% annual turnover), with the cash to be made available within 24 hours of approval in most cases.

Why has the scheme been announced?

The scheme comes in response to widespread concern that many small businesses could not easily access previously existing schemes. Sunak answered this worry with the news that the application process would not require businesses to provide future models or strategies as assurance, and would only require a 2 page form to be completed.

The government have pledged to guarantee 100% of the loan which should enable lenders to process applications with increased leniency and efficiency. As with the CBILS scheme, the Bounce Back scheme will also see the government absorb interest costs for the first 12 months of the loan term. The interest rates will be set at 2.5% following the initial 12 month period.

Eligibility

To be eligible, your business must be based in the UK, negatively affected by the coronavirus and was not an “undertaking in difficulty” on 31 December 2019. Banks, insurers, public sector bodies, state-funded schools and grant-funded further education establishments will not be eligible.

Please get in touch if you wish to discuss anything relating to the Bounce Back loan scheme by calling 01392 241228 or emailing misty@griffinaccountancy.co.uk.