Additional Funding Announced: Coronavirus Bounce Back Loan

Additional Funding Announced: Coronavirus Bounce Back Loan

Given the difficulty experienced by businesses trying to access funds under the existing loan schemes, small and medium-sized businesses affected by COVID-19 will now be able to apply for loans from £2,000 to £50,000, under a new Government scheme.

The loans will be interest free for the first 12 months, up to the value of 25 per cent of business turnover, with a cap of £50,000. The Government will give the lender a 100% guarantee on the loan.

The Chancellor, Rishi Sunak has said the loans will not be subject to complex eligibility criteria. Firms will only have to prove they were viable prior to the Coronavirus outbreak and will not have to prove that they will be viable after the crisis, which many firms have struggled to prove given the uncertainty at the moment.

Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The government has said it will work with lenders to agree a low rate of interest for the remaining period of the loan.

The scheme requires filling in a two-page self-certification form online with funds being available within 24 hours of approval.

The scheme will be delivered through a network of accredited lenders and will launch on 4 May 2020.

You can apply for a loan if your business:

  • is based in the UK
  • has been negatively affected by the Coronavirus outbreak
  • was not an ‘undertaking in difficulty’ on 31 December 2019

The following businesses are not eligible to apply:

  • banks, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • further-education establishments, if they are grant-funded
  • state-funded primary and secondary schools
  • you cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). However, if you have already received a loan of up to £50,000 under CBILS, you can have it transferred to the Bounce Back Loan Scheme

We recommend you follow the news over the next week to see when the scheme launches, in order to access the application process. In the meantime, please call us for specific advice on your circumstances – 01633 810 081 or email us at info@kilsbywilliams.com