The British government launched the Bounce Back Loan Scheme to help businesses adversely affected with 100% government-backed loans in a bid to help businesses amid the coronavirus epidemic. Under the scheme, applicants can make applications for 2,000 – 50 000 Pounds. Creative Legal Solutions Solicitors as a firm committed to helping small to medium-sized businesses has been answering its client’s questions regarding the Bounce Back Loans. We have taken it upon ourselves to compile a list of the question and answers we have been frequently asked since the launch of the Scheme. If you feel you still are not answered from our compilation below, feel free to get in touch with us for a FREE consultation in this regard.
Who qualifies for the loan?
Any business bases in the Uk that has been negatively affected by coronavirus, which is not a bank, insurer, reinsurer, public sector body or state-funded school. Companies of any size can apply but the scheme is aimed particularly for small businesses with less than 10 employees and sole traders. Companies that apply must have been trading on 1 March and must have been an “undertaking in difficulty” as of 31 December 2019. The business must not be in liquidation, bankrupt or undergoing debt restructuring.
How much can be borrowed under the Bounce Back Loan?
Applications can be made of up to 25% of your turnover in the 2019 calendar year, up to a maximum of 50, 000 Pounds. The interest rate is fixed at 2.5 %. No setup or application fees apply. The government will cover interest and fees for the first year.
What is I have already made an application under a different coronavirus lending product but have not heard back from the Lenders, Can I still apply for the bounce back loan?
Yes, you can still qualify. There is an alternative of converting existing and future coronavirus business interruption loans of 50 000 Ponds or less to bounce back loans.
What if I don’t have anything to offer as security?
Fortunately, the bounce-back scheme is 100% government-backed. The government will guarantee 100% of the loan. You do not need to offer security or personal guarantees nor do applicants have to stick with their existing lenders.
How long will it take for me to get the money?
If you are applying via your existing lenders should expect to get the money within days. However, if you are applying via a new lender, it will be longer, but banks have promises to process as quickly as possible.
How do I apply for the loan?
The fastest way will by filling an online simple application form which will ask for basic details like your annual turnover, the amount of credit you are seeking and whether your business has been negatively affected by coronavirus amongst other general questions
How long is the term of the Loan?
The loan term is 6 years but you can pay back sooner with no early repayment fees. There is no principal repayment required within the first twelve months.