Bounce Back Loans
As part of the Government’s attempts to support businesses during the current crisis the Chancellor announced a new 100% Government backed loan scheme for small businesses. There have been criticisms of the take-up of the Coronavirus Business Interruption Loan Scheme (CBILS) and the ability of businesses to obtain funding under the CBILS. (See our CBILS article for further information on this scheme)
Jonathan Aldersley, Partner and Business Law specialist explains how the Scheme will work.
What is the Bounce Back Loan Scheme?
The new Bounce Back Loans scheme will provide loans of up to £50,000 to small businesses affected by the pandemic.
It is hoped that the Scheme will provide funds for small firms who need assistance with cash flow to keep operating. The finance is intended to be available within a few days of submitting an application. The loans are provided by Government approved lenders with a 100% guarantee for the loan.
The key elements
– 100% guarantee for the loan underwritten by the Government
– No fees or interest payable for the first 12 months
– No repayments will be due during the first 12 months
– The Scheme will launch for online applications on 4 May
– Borrowing can be between 2000 and £50,000 up to a value of 25% of turnover.
The loans will not be subject to any business liability tests or complex eligibility criteria and are a direct response to the slow take-up in the CBILS loans. So far 16,000 CBILS have been issued compared to more than 250,000 in the equivalent scheme in France and more than 100,000 in Switzerland. You can apply for a Bounce Bank Loan if your business is based in the UK, has been negatively affected by coronavirus and was not an “undertaking in difficulty” as at 31st of December 2019. Banks, insurers and reinsurers, public sector bodies and further education establishments are excluded from the scheme. The scheme is not available to anyone who was already applied under the CBILS.
If you require any further information or assistance in relation to the business issues facing your company/organisation as a result of COVID-19 our commercial specialists will be happy to speak to you.
We remain fully operational (save that we are undertaking remote working) but can make use of video conferencing and telephone conferences in order to provide advice and assistance.
If you would like any further information or require assistance in dealing with any application that has been approved please contact Jonathan Aldersley on 07793 953539 or Justin Kelly on 07760 629181, alternatively, please feel free to send an e-mail to: firstname.lastname@example.org or email@example.com
To view Butcher & Barlow’s own working practices, please visit www.butcher-barlow.co.uk/news.