Applications for the Bounce Back Loan Scheme open today

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Applications for the Bounce Back Loan Scheme open today

Key Contact: Christian Farrow

Author: Elena Visser

The Bounce Back Loan Scheme (BBLS) opens today to help small and medium-sized businesses borrow between £2,000 and £50,000. The government will guarantee 100% of the loan and there will not be any interest on the loans for the first 12 months. Loan terms will be up to six years and no repayments are due during the first 12 months.

The BBLS is available to businesses through a number of accredited lenders across the UK and the list of accredited lenders can be found here. Businesses should approach lenders themselves ideally through the individual lender’s website. A short application form will need to be completed which self certifies that your business is eligible for a loan under BBLS. The BBLS is designed to be fast for lenders to process and quick and easy for businesses to access.

If your business is eligible, it will be subject to appropriate customer fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks. If a lender turns you down, you can still approach other lenders within the scheme.

Eligibility criteria include being able to self-certify to the lender that your business:

  • has been impacted by the COVID-19;
  • was not in business difficulty at 31 December 2019;
  • is engaged in trading or commercial activity in the UK and was established by 1 March 2020;
  • is not using the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CBILS) or the Bank of England’s COVID Corporate Financing Facility Scheme (CCFF), unless the Bounce Back Loan will refinance the whole of the CBILS, CLBILS or CCFF facility;
  • is not in bankruptcy or liquidation or undergoing debt restructuring at the time it submits its application for finance;
  • derives more than 50% of its income from its trading activity;
  • is not in a restricted sector.

Business that are exempt include:

  • credit institutions;
  • insurance companies;
  • public-sector organisations; and
  • state funded primary and secondary schools.

More information about the BBLS and a list of frequently asked questions can be found on the British Bank website here.

A new discretionary fund has been set up to help local businesses outside the scope of the business grants fund scheme

On Friday, the Business Secretary Alok Sharma and the Minister for Regional Growth and Local Government, Simon Clarke spoke to local authorities in England to set out that up to £617 million would be made available. This is an additional 5% uplift to the £12.33 billion funding previously announced for the Small Business Grants Fund (SBGF) and the Retail, Hospital and Leisure Grants Fund (RHLGF).

The additional funding has been put in place to help small businesses with ongoing fixed property-related costs. Local authorities have been asked to prioritise businesses who work in small spaces, market traders and small charity properties that meet criteria for the Small Business Rates Relief that pay council tax rather than business rates. The allocation of the funding will be the discretion of each local authority.

There will be three levels of grant payments. The maximum will be £25,000. There will also be grants of £10,000. Local authorities will have discretion to make payments of any amount under £10,000 and councils will be able to adapt their own approaches based on the local circumstances.

Further guidance is expected to be set out shortly however the government’s recent announcement can be found here.

Please see our daily updated Financial Support Guide for Businesses for further information- COVID-19 FINANCIAL SUPPORT FOR BUSINESSES

For more information on any of the points raised, please contact our corporate team.

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