The government announced last night (27 April 2020) that they will be introducing a new Coronavirus loan scheme to compliment their current measures (CBILS and CLBILS) see here
The latest offering in the government’s suite of financing packages is The Bounce Back Loan Scheme which is aimed at Small and Medium sized businesses (SMEs).
SMEs will be able to borrow between £2,000 and £50,000, and the government will guarantee 100% of the loan to encourage banks to lend. This goes further than the CBILS measure which guarantees 80%. Similar to CBILS, the government will also pay interest and fees for the first 12 months.
Loans can be for up to 6 years, and there will be no repayments due in the first 12 months.
SME businesses can apply if:
- They are based in the UK
- They have been negatively impacted by Coronavirus
- They were not an “undertaking in difficulty” on 31 December 2019
The loans will be easy to apply for through a short online application and the government are aiming for funds to be with businesses within days of applying.
If you have already agreed a loan under the CBILS, you cannot apply for the Bounce Back Loan, but if you have received a loan of up to £50,000 under CBILS, you may be able to transfer this to the Bounce Back Loan scheme if you agree this with your lender - this can be up to 4 November 2020.
The scheme is not available until the 4 May 2020, and we expect further information on the scheme to be published soon. We will update our guidance once this information is available.
