Last chance to apply for a Bounce Back Loan
The loan scheme was launched last year to support businesses cope with the impact of the pandemic, and has been enormously popular. According to the latest figures from the Treasury, three Bounce Back Loans have been issued every minute since their introduction in May 2020, with almost £180bn in funding provided through the scheme.
The scheme has not been without its controversies however. Some lenders have used the loan scheme as a way to push businesses into opening business accounts with them, while significant levels of fraud mean that the scheme is likely to cost the taxpayer billions.
What can I get with a Bounce Back Loan?
The Bounce Back Loan was designed to help small and medium-sized businesses, allowing them to borrow up to 25% of their turnover. This is capped at a maximum loan size of £50,000.
There is no interest to pay for the first 12 months, nor any fees. After a year, interest starts being charged at 2.5% per annum.
Loans last for six years, but can be repaid early without any additional fees to worry about. Before you start making repayments, your lender will contact you to ask if you want to extend the term of the loan to 10 years, take up making interest-only repayments for six months, or pause your repayments for six months.
Bounce Back Loans are provided by 29 different lenders, including many of the big high street names. You can apply to these lenders directly ‒ you’ll have to fill out a short form and self-declare that you are eligible for the scheme.
The loan is entirely guaranteed by the government, ensuring that if you can’t keep up with your repayments the lender won’t lose out.
Time is running out
Applications for a Bounce Back Loan close on 31 March, so you’re almost out of time to take advantage.
Importantly, if you already have a Bounce Back Loan but didn’t take out the full amount you could qualify for, then you can top it up to this maximum amount. Again, you must apply for this top-up by the end of the month.
Who is eligible for Bounce Back Loans?
You will need to meet certain criteria in order to qualify for a Bounce Back Loan. These include:
- Your business must be based in the UK
- Your business must have been established before 1 March 2020
- Your business must have been adversely impacted by the pandemic
Businesses can apply for a Bounce Back Loan so long as they are not banks, insurers and reinsurers, nor public-sector bodies, while you also cannot apply if you’re already claiming other forms of government support such as the Coronavirus Business Interruption Loan Scheme or the Coronavirus Large Business Interruption Loan Scheme.