As of the 4th May 2020 Micro-businesses and SME’s will be able to apply for the Bounce Back Loan Scheme which can offer up to £50,000 within 24 hours. The criteria set is almost self-certifying with little checks being carried out by the banks and all loans are interest free for the first 12 months with the balance likely to be charged at a rate of 3% which is around half the rate set in the Coronavirus Business Interruption Loan.
In the main, the Bounce Back Loan Scheme will work as follows:
- Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days
- Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form
- Borrowers will fill in a two-page application form in which they will certify that they have a viable business, lifting obligations on lenders to carry out their own checks
- Loan terms are up to six years
- All firms trading as of March 1 will be able to get cash
- Banks will no longer require forward financials or business plans
- You can’t apply if you’ve already had a coronavirus business interruption loan but you can port your existing loan of up to £50,000 across
- Loans are capped at 25% of turnover
- Your business must not have been an “undertaking in difficulty” as of December 31 2019
If you have already applied for the Coronavirus Business Interruption Loan then you will not be able to apply for the Bounce Back Loan but if you have received the CBILS then this can be transferred to the new scheme which would allow you to benefit from a reduced interest rate.