Last updated on May 12, 2022

UPDATE (15 February 2021):  Bounce back loan borrowers can delay repayments by extra six months

For more information see the government website at: https://www.gov.uk/government/news/chancellor-eases-burden-on-more-than-a-million-businesses-through-pay-as-you-grow-flexible-repayment-options

13 May 2020

Bounce Back Loan Scheme (BBLS)

Well technically it isn’t, but the Bounce Back Loan Scheme (BBLS) the government have introduced to help business through the Corona pandemic are very affordable and very enticing!

If you have been sat thinking that these loans are only for those in crisis then this may be good news.  As these loans can be used however you see fit to help the business. This means you can use it for a number of things …

It can be used to support your usual income, therefore if you have fallen though the cracks of the other HMRC Schemes to pay yourself or your staff you can use this money to help pay usual incomes.

If there’s a marketing project that you’ve been wanting to do but couldn’t spare the money, and you can afford the repayments, then this is a really good opportunity to do that.  Just make sure you have done your numbers and you know the project is going to make money to cover the repayments.

If you are struggling with cashflow because your company debt is taking up a lot of the profit you are making at the minute. Then this might be a very affordable route for you to actually lower that debt or to get rid of it in total.

Is there something you with to buy that will improve your business?  There might be things that you want to put in place that will help you trade after the Corona crisis.

The terms of the Bounce Back Loan Scheme are:

  • The loan will be 100% guaranteed by the government
  • Length of the term will be six years
  • The first 12 months interest will be paid by the government with 12 months of payment deferred.
  • Loans will be between £2,000 and £50,000, capped at 25% of turnover
  • The Bank of England will offer term funding scheme with “additional incentives for SMEs to extend the term of some of the funding they access via the TFSME to align with the 6-year term of loans made through BBLS” 
  • Banks subject to the UK Leverage Ratio will be able to exclude loans under BBLS from the leverage ratio exposure measure.

There are certain criteria that you have to be able to say yes to, but it’s self-certified.

Regarding the turnover limit, some banks are asking for 12 months of the last previous calendar year others are asking for the last financial year.

If you want to know more about these loans then there is a government website HERE and then you should check out your own banks website.