Bounce Back Loan Scheme (BBLS)
The Bounce Back Loan Scheme (BBLS) is a new scheme designed to enable businesses to access finance more quickly during the coronavirus outbreak.
Coronavirus business loan schemes extended for applications to 30 November
Applications to the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Bounce Back Loan Scheme have all been extended until 30 November.
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 enables businesses to obtain a six-year term loan at a government set interest rate of 2.5% a year. The government will cover interest payable in the first year. These are the main features:
- Up to £50,000 loan: Loans will be from £2,000 up to 25% of a business' turnover or £50,000, whichever is lower
- 100% guarantee: The scheme provides the lender with a government-backed, full guarantee (100%) against the outstanding facility balance, both capital and interest. The borrower always remains 100% liable for the debt
- Interest rate: The government has set the interest rate for this facility at 2.5% per annum, meaning businesses will all benefit from the same, low rate of interest.
- Interest paid by government for 12 months:The government will make a Business Interruption Payment to the lenders to cover the first 12 months of interest payable, so businesses will benefit from no upfront costs
- No principal repayments for first 12 months: Borrowers will not have to begin principal repayments for the first 12 months, thereafter capital will be repaid on a straight line basis
- No guarantee fee for businesses or lenders to access the scheme
- Finance terms:The length of the loan is for six years but early repayment is allowed, without early repayment fees
- No personal guarantees: No personal guarantees are allowed, and no recovery action can be taken over a principal private residence or principal private vehicle
Apply for a loan
The BBLS is available to businesses through a number of accredited lenders across the UK. The full rules of the scheme and guidance on how to apply is available on the British Business Bank website.
What you can't apply for
You cannot apply if you're already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).
If you've already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.
The British Business Bank has published a selection of FAQs on the BBLS for small businesses.