A further financial assistance measure has gone live today to assist small and medium sized businesses.
The Bounce Back Loan Scheme is a loan scheme for small to medium businesses affected by COVID-19 with loans of between £2,000 up to £50,000 or 25% of business turnover whichever is lower. The business remains liable for repayment of the loan, but in order to get the banks lending as needed the Government have said that they will guarantee 100% of the advanced amount. The Government are also confirming that they pay the interest for the first 12 months, with interest rates being set at 2.5%. Further there are no arrangement fees and no repayments required in the first 12 months. Loan terms will be up to 6 years and the Banks are not permitted to require personal guarantees to provide security for the lending or take recovery action against the borrower’s personal assets such as their home for example.
There are eligibility criteria which include:
● You need to be based in the UK
● You need to have been negatively affected by Coronavirus and not have been what is termed an “undertaking in difficulty” as at 31 December 2019
● You cannot have already claimed under the Coronavirus Business Interruption Loan Scheme*
● You cannot be a bank, insurer, reinsurer, public-sector body or a state funded primary or secondary school.
*It may be possible to transfer an existing loan under the Coronavirus Business Interruption Scheme before 04 November 2020, if it is for less than £50,000
