Small business owners can now apply to accredited lenders by filling out a simple online form, with only seven questions. There is no longer a need to provide a business plan or projections.
This scheme will help businesses and sole traders affected by coronavirus (COVID-19) to apply for loans of up to £50,000.
The latest details published by the Government are available here:
- What is The Bounce Back Loan?
- The Bounce Back Loan scheme is intended to assist small and medium-sized businesses to borrow between £2,000 and £50,000;
- The government will guarantee 100% of the loan;
- The amount of the loan you can apply for is capped at 25% of your total turnover, although we are still awaiting a definition of how you prove turnover (previous schemes have relied upon latest statutory accounts).
- What Are The Terms Of The Bounce Back Loan?
- There will not be any fees or interest to pay for the first 12 months.
- Thereafter an affordable flat rate of 2.5% interest will be charged on these loans.
- Loan terms will be up to 6 years.
- No repayments will be due during the first 12 months.
- Thousands of small firms and sole traders – including high street staples like hairdressers, coffee shops and florists – are eligible for the Scheme;
- You must be able to demonstrate the impact of COVID-19 upon your business;
- Your business must have been established before 1 March 2020;
- Your business must also have been trading as a going concern;
- Any business that has already taken out a Coronavirus Business Interruption Loan of £50,000 or less can apply to have these switched over to this new scheme.
- How to Access the Scheme
- Small business owners can apply to accredited lenders by filling out a simple online form, with only seven questions.
- What Should I Consider Before Making An Application
- Fundamentally, this is a loan and requires repayment, you should consider carefully how much you think you need, ideally preparing a simple forecast to support your assessment, and ensure you have claimed all other reliefs and grants available to you.
- You may feel that you need this loan to keep your business going especially where you are either
- self-employed but don’t qualify for the Self-Employed Income Support scheme (https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme, or if
- you are a limited company directors who has limited support available.