Coronavirus bounce back loan scheme
On 27 April 2020, the Government announced further assistance to businesses through an additional loan scheme focused on small and medium sized businesses as accessing funds through the original Coronavirus Business Interruption Loan Scheme has been difficult due to restrictions imposed by financial institutions.
This new Bounce Back Loan Scheme is being launched on 4 May and the main points are summarised below;
- The business can borrow 25% of their turnover, up to a maximum of £50K. The period to which the turnover relates has not been defined as yet.
- The loan is 100% guaranteed by the Government.
- There is no interest for 12 months.
- There are no fees for taking out the loan.
- The loan term can be up to 6 years.
- No repayments are due for first 12 months.
- Low interest rates will be allocated against these loans for the remaining term after 12 months.
- The business must be based in the UK.
- The business must have been negatively affected by Coronavirus and was not in difficulty prior to the pandemic as at 31 December 2019.
- You cannot claim if you are already accessing funds through the Coronavirus Business Interruption Loan Scheme (CBILS).
- If an existing loan up to £50K has been accessed through the CBILS, you can transfer the loan to the new Bounce Back Loan Scheme via your lender until 4 November 2020.
We are expecting more details to become available shortly as to how you apply for the scheme and more clarity on any restrictions being imposed.
This email is an abbreviated summary of legislation announced by the Government in respect of the COVID-19 outbreak at the time of the e-mail release. Please note that this is not intended to be advice, and should not be relied upon as such. Honey Barrett will take no responsibility for any decisions or actions taken based on the information included here.
If you have any questions please do not hesitate to contact your normal contact at Honey Barrett, who can assist with any enquiries.