The coronavirus pandemic is hitting the UK hard; with lockdown restrictions putting a stop to many business operations throughout the country and many people unable to work or earn a living, we are living in unprecedented times.
The Chancellor, Rishi Sunak, has unveiled an impressive package designed to support businesses and individuals throughout the country due to the economic impact of the coronavirus. One of the most important forms of aid is no doubt the Bounce Back Loan, which will help thousands of struggling businesses to stay afloat this year.
Bounce Back Loans for UK Businesses
Small businesses across the UK can now benefit from the government’s recently launched Bounce Back Loan. The loan is intended to aid small businesses who are struggling due to the current crisis and need a quick loan to tide them over until business is more profitable.
The Bounce Back Loan is intended to be fast and easy-access, making it simple for small business owners to apply and receive the money within just days; it also offers a flat rate interest fee of 2.5%, making it an attractive choice for businesses in need. The government has also promised to cover the cost of any fees or interest for the loan for the first 12 months through Business Interruption Payments (BIP). It’s hoped that the government-backed loans will allow many businesses to weather the coronavirus pandemic despite having to postpone operations.
How do I apply for a Bounce Back Loan?
You can apply for a Loan if you run a business which is based in the UK and has been affected by the coronavirus crisis. Applying for a Bounce Back Loan is quick and easy, with the application process available to complete online; you can go to the British Business Bank website (https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/) to find accredited lenders offering the loan.
There are a few restrictions on the Bounce Back Loan that businesses should be aware of before applying. Businesses that have already taken out a Coronavirus Business Interruption Loan of up to £50,000 may not take out a new Bounce Back Loan, but they can switch their loan to this scheme if desired. To be eligible for the loan, business owners must also self-declare that the business was not a business in difficulty as of 31 December 2019, in order to prove that aid is only needed due to COVID-19.
How much can I borrow?
The amount available to borrow as a Bounce Back Loan depends upon the value and turnover of your business. Six-year term Bounce Back Loans are available from just £2,000 all the way up to £50,000; the total value of a Bounce Back Loan may be no more than 25% of the business’ turnover, which means to apply for the maximum loan your business’ annual turnover must be £200,000 or higher.
What is the application process?
As it’s designed to be simple and fast, the process for applying for a Bounce Back Loan is very easy. No matter which lender you choose, the application form will only ask seven questions, and you will need to self-certify that your business is eligible for the loan under the Bounce Back Loan Scheme. Your business will then be subject to the relevant checks, including the Anti-Money Laundering (AML) and Know Your Customer (KYC) checks. The lender will then make a decision on your application within the next few days; accepted applicants for the Bounce Back Loan should receive cash within just a few days of applying.
If you are turned down for the Bounce Back Loan, you can still approach another lender for the loan.