With the deadline looming, have you applied for the Govts Bounce Back Loan?
As the entire nation is easing itself to a new phase in this unprecedented time, to some entrepreneurs there is a slight silver lining amidst the hullabaloo: they may be able to gain access to financial aid to help to boost their business in the upcoming months.
The UK Treasury has recently announced an extension for the deadline of emergency business loan application. This means that businesses in the UK can still apply for loans until the end of January 2021. The deadline extension is applicable to Bounce Back Loan Scheme or BBLS, Coronavirus Business Interruption Loans or CBILS and the Coronavirus Large Business Interruption Loan Scheme or CLBILS. This is also applicable to Future Fund, a financial aid program intended for UK startups that are affected by the coronavirus.
According to Rishi Sunak’s latest tweet, the deadline extension was intended to send additional government support to entrepreneurs who are willing to apply for the loan scheme. This will enable the entrepreneurs to apply additional financial aid in order to keep their business afloat.
So what does this mean to you? Here are all the things you need to know about the Bounce Back Loan Scheme.
What is Bounce Back Loan?
As we have mentioned earlier, the Bounce Back Loan Scheme is a government program that aims to send quick financial aid to businesses that have been affected by the coronavirus outbreak. The beneficiaries of the BBLS are small to medium-sized enterprises. These enterprises can borrow between £2,000 to £50,000 from lenders, with a turnover rate of up to 25%.
To further ease the financial burden of our entrepreneurs, the government has promised that on the first year of their loan, entrepreneurs will be getting 100% of the financial aid and won’t be paying any interest rates or fees from their lenders. After 1 year, the entrepreneurs will be paying an interest rate of 2.5% each year. Just to reiterate, the deadline of application for this loan scheme has been extended until the last day of January 2021.
If you have already applied for the BBLS earlier this year but borrowed below the threshold, you can request a top up to the maximum amount on your existing loan. Just make sure that you request your top up before the deadline.
Who is eligible to apply for the Bounce Back Loan?
Are you interested in applying for the loan scheme? Are you based in the United Kingdom? Was your business established before 1st March 2020? Is your business greatly affected by the coronavirus outbreak?If your answer to these questions is a resounding yes, then you are eligible to apply for the BBLS but if your business has been categorised as a business in financial struggle on 31 December 2019, you will be urged to comply with additional restrictions provided by the state.
Who is not eligible to apply for the Bounce Back Loan?
Most entrepreneurs can apply for the BBLS except for public-sector enterprises, state-funded primary schools, state-funded secondary schools, insurers, reinsurers (excluding insurance brokers) and banks.
You are also not qualified for the BBLS if you have already applied financial aid through the Coronavirus Business Interruption Loans Scheme or CBILS, the Coronavirus Large Business Interruption Loan Scheme or CLBILS and the COVID-19 Corporate Financing Facility.
If you have applied and received a loan of up to £50,000 under the CBILS, CLBILS or COVID-19 Corporate Financing Facility, you can ask your lender to convert this into the BBLS and you will be given until the end of January 2021 to make this transfer.
Other Things About the Bounce Back Loan that You Show Know About
- The loan is good for 6 years.
- If you are capable, you can repay the loan early and you won’t be charged any fees.
- On the first 12 months of the loan, no repayments will need to be made.
- When the date of your first repayment is almost due, your lender will ask you if you are interested to extend the term of your loan from 6 to 10 years.
- You can avail of the move to interest-only repayments within 6 months (this option can be applied for up to 3 times only).
- You can choose to pause your repayments within 6 months if you have already made a minimum of 6 repayments (this option can be applied for up to one time only).
If you want to apply for the Bounce Back Loan Scheme and you are qualified, now is the best time to apply. GOV.UK, shows you have 28 lenders to choose from, including the major banks. If you have chosen a suitable lender, visit their website, fill out an online application form, and self-declare that you are qualified to apply for the BBLS. After sending your application, the lender will offer you the BBLS or another type of financial aid. You will be accountable for repaying the amount of financial aid that you borrowed.
But what if your primary lender turns you down? Just take a deep breath and continue applying for the BBLS from other lenders.
If all this information is too much to handle, you may want to consider talking to a firm who can help you find the right kind of finance and help your business bounce back from the pandemic.
We understand that making the right decision for your business is very important. That is why Nigel B Butler Limited Accountants is here for you. We can help you set goals and action plans to get you where you want to be, remove the blocks that are stopping you from getting there, get the systems in place to allow your business to grow and market strategies and customer service systems to satisfy your customers.
Get in touch with us on 01793 852121 or . We will work with you in the way that suits you – in person, on the phone or online.