Britain’s small businesses will be able to apply for quick and easy-to-access loans of up to £50,000 with the cash expected to land within days.
What is the Bounce Back Loan Scheme (BBLS)?
The Bounce Back Loan Scheme (BBLS) provides financial support to businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak and that can benefit from £50,000 or less in finance.
The scheme is a part of a wider package of government support for UK businesses and employees. Read more at the Government’s Business Support website.
Thousands of small firms and sole traders – including high street staples like hairdressers, coffee shops, and florists – will be eligible for 100% government-backed Bounce Back Loans to help them make it through the coronavirus outbreak.
How it works
- Loans range from £2,000 up to 25% of a business’ turnover. The maximum loan amount is £50,000.
- No interest will be charged and no repayments will need to be made in the first 12 months.
- The interest rate for the facility is set at 2.5% per annum, meaning businesses will all benefit from the same, affordable rate of interest.
- The length of the loan is six years.
- You can repay the loan early without penalty.
- The scheme provides the lender with a full (100%), government-backed guarantee against the outstanding balance of the finance (both capital and interest).
- The borrower remains 100% liable for the debt.
- Lenders are not permitted to take personal guarantees or take recovery action over a borrower’s personal assets (such as their main home or personal vehicle).
- There is no fee to access the scheme for either businesses or lenders.
Who is eligible
- must have been established before 1 March 2020.
- has been impacted by the coronavirus (COVID-19) pandemic
- was not a business in difficulty on 31 December 2019
- is not in bankruptcy or liquidation or undergoing debt restructuring at the time it submits its application for finance
- is not using the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS) or the Bank of England’s Covid Corporate Financing Facility Scheme (CCFF), unless the Bounce Back Loan will refinance the whole of the CBILS, CLBILS or CCFF facility
- derives more than 50% of its income from its trading activity
- is not in a restricted sector (credit institutions, insurance companies, public-sector organisations, state-funded primary and secondary schools)
- Eligible companies will be subject to standard customer fraud, anti-money laundering (AML), and Know Your Customer (KYC) checks prior to any loan being made. Some State Aid restrictions may apply to applications.
How much would I have to return?
You will not need to make any payments for the first 12 months, however, you can repay the loan at any time.
|Representative ||Term |
|Loan amount ||First monthly repayment |
|Interest rate ||Total amount repayable |
The table below shows illustrative costs for a Bounce Back Loan.
|Loan amount||First monthly payment (at month 13)||Total amount repayable over the term of the loan|
Your monthly repayments will reduce over time as you repay the capital balance.
How to apply?
To apply for a bounce back loan, you will need to contact a bank directly and fill in a short online application.
The application form is easy and quick to fill. You will need details of your annual turnover, account number, the amount you want to borrow, and sometimes a copy of your tax return.
Banks, which offer bounce back loans
All banks charge the same 2.5% interest (after the first 12 months at 0%).
Please find the current list of the banks below (updated: 7 May 2020).
- Bank of Scotland
- Barclays Bank
- Clydesdale Bank
- Danske Bank
- Lloyds Bank
- Santander Bank
- Starling Bank (since 11.05.2020)
- The Co-operative Bank
- Ulster Bank
- Yorkshire Bank