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Applications open for Bounce Back Loan Scheme

Sue Lucas

From 9am this morning, small business owners can apply for the Bounce Back Loan Scheme, by filling out a simple online form, with only seven questions.

The government has also agreed with lenders that an affordable flat rate of 2.5% interest will be charged on these loans. And 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 generous new scheme.

The Bounce Back Loan scheme is the latest step in a package of world-leading support measures launched by Chancellor Rishi Sunak – with £7.5 billion already awarded in business grants, 4 million jobs supported through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms. To apply, see further information about the Bounce Back Loan scheme.

As part of the scheme, small businesses can borrow between £2,000 and £50,000. The government will provide lenders with a 100% guarantee and cover the cost of any fees and interest for the borrower for the first 12 months. No repayments will be due during this period to enable firms to get back on their feet.

The loans are available through a network of lenders, including the five largest banks.

Which banks are offering Bounce Back Loans?
• Bank of Scotland
• Barclays
• Clydesdale Yorkshire Bank Group
• Danske Bank
• Lloyds Bank
• NatWest
• Santander
• Royal Bank of Scotland
• Ulster Bank

Eligibility requirements
  • Eligible business must be based in the UK and established by 1 March 2020. They will need to generate at least 50% of their income from trading activity and show that this has been disrupted due to Coronavirus.
  • Businesses cannot have been in difficulty on 31 December 2019 and cannot be in bankruptcy or liquidation at the time of applying for a Bounce back loan.
  • Businesses that are already claiming under other Government schemes to support their business, such as CBILS or the Bank of England’s Covid Corporate Financing Facility Scheme cannot also hold a Bounce back loan. The only exception is if the Bounce back loans is being used to payback the other Government loan scheme.
Further Information
  • 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.
  • The borrower always remains 100% liable for the debt.