Some information and clarification about the Bounce Back Loan Scheme was issued over the weekend.
It goes “live” today (4 May) and applications can be submitted from today.
Precise details about the underwriting process haven’t been published but it is designed to be pretty straightforward. However, HMRC will carry out retrospective checks to ensure applications are valid. Presumably these will compare information provided with tax return information submitted.
The key points are these:
- A business, company, sole trader or partnership. must have been trading on 1 March 2020
- You must have been adversely affected by Coronavirus
- The business must not have been an “undertaking in difficulty” at 31 December 2019 (There is a fairly detailed definition of a “business in difficulty” on the British Business Bank website
- Loans are aimed at small businesses with fewer than 10 employees, although larger businesses can apply
- The minimum loan is £2,000
- The maximum loan is £50,000 – but capped at a maximum of 25% of turnover (so far as we can see, there is no indication of what period the turnover is calculated over – presumably the last submitted accounting period)
- The loan term is a maximum of six years
- The interest rate is to be set at 2.5%. We think this is actually 2.5% and not “2.5% above base”
- The government will cover interest and fees for the first 12 months and you will start repayments 12 months after the start of the loan
Obtaining a loan
The, more than, 50 lenders operating the CBILS scheme will offer loans under the “Bounce Back” scheme.
Applying to your own bank will be relatively quick and the indication is that loans will be approved and paid within days.
Applying to a different lender could take longer because of the extra checks required.
There is a simple online form – although at the time of writing we couldn’t find it. We will add the link when it becomes available. We know that some banks already have online applications and we have heard of provisional offers being made within a couple of hours.
How can we help?
At this stage, we don’t know exactly what information will be required. However, we imagine that it will probably ask for details of turnover, balance sheet position, bank account details etc. If you aren’t sure about anything requested, ask us. It is going to be better to take a little time and get the information right, rather than risk queries causing delays.
You can contact us via the usual channels:
Telephone – 01509 816150
Email – email@example.com
Webform – below
We expect to be busy so please keep trying if you can’t get through at first.