Updated – Coronavirus Bounce Back Loan Scheme (BBLS)

The Bounce Back Loan Scheme (BBLS) launched 4 May 2020.
 
All major high street banks are offering the scheme.
 
Some of the features and eligibility criteria have been updated.
 
Features
Key features of the scheme are as follows;
 

• Businesses (Ltd company, Sole Trader, LLP or Partnership etc) will be able to apply for loans of between £2,000 and up to 25% of their annual turnover. The maximum loan amount is £50,000
• The government will guarantee 100% of the loan (compared to the 80% guarantee under CBILS loans)
• There won’t be any fees or interest to pay for the first 12 months
• Loan terms will be up to 6 years
• No repayments will be due during the first 12 months
• The interest rate for the facility is set at 2.5% per annum
• No personal guarantees

 
Eligibility
You can apply for a loan if your business can self-certify:

• It is based in the UK and established by 1 March 2020
• It has been negatively affected by coronavirus
• It is not currently using government-backed Coronavirus loan scheme (unless using BBLS to refinance whole facility)
• Was not an ‘undertaking in difficulty’ on 31 December 2019       

 
You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS), however if you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.
 
Which businesses meet the “undertaking in difficulty” criteria?
A business is considered in difficulty if it met any one of the following on 31 December 2019:
 

• Individuals or companies that have entered into collective insolvency proceedings;
• Limited companies, partnerships, limited partnerships or unlimited liability companies which have accumulated losses greater than half of their share capital in their last annual accounts (this does not apply to SMEs less than 3 years old);
• Where the undertaking has received rescue aid and has not yet reimbursed the loan or terminated the guarantee, or has received restructuring aid and is still subject to a restructuring plan;
• A company which is not an SME where, for each of the last two accounting years: i) your book debt to equity ratio has been greater than 7.5; and ii) your EBITDA interest coverage ratio has been below 1.0

The following are not eligible for the Bounce Back loan

• Banks, insurers and reinsurers (but not insurance brokers)

• Further-education establishments, if they are grant-funded
• State-funded primary and secondary schools
• Public-sector bodies

 
How to apply 
If you use online banking Businesses are required to login and complete the on-line application whilst logged in. Alternatively, you should visit your banks website and complete the online application form.
 
There will also be series of questions you will need to answer, these should all be fairly straightforward.
 
Information needed for application
We would recommend you gather the following information to assist with your application:

• Company registration number
• Commencement of trade date
• Bank details
• Annual turnover
• Amount you want to borrow

 
It is anticipated that loans will be paid within 24-48 hours of approval.
 
If you require any assistance, please don’t hesitate to contact us.
 
Further Information
Further information from the Government regarding this scheme can be found at -https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan