Both the Bounce Back Loan Scheme and the CBILS Loan Schemes have been extended to the 31st January 2021.
The Bounce Back Loan scheme lets you apply for between £2,000 and £50,000, subject to the lenders eligibility criteria.
Below is a summary of the latest information on the Bounce Back Loan Scheme:
- You now have until 31 January 2021 to apply, but it is better to apply as soon as possible as the lenders will require you book a background-check appointment.
If you are self employed / sole trader, you can now apply without business bank account at some banks. If you have a personal bank account at one of the following banks , you can apply with the personal account :
- Bank of Scotland
- HSBC (but you’ll need to have successfully applied for a feeder account
- by 30 Sep) (3)
- Lloyds Bank – but need to open a fee-free ‘loan servicing account’
* You must have had the bank account with one of these lenders for a while, they do not approve BBLS to new clients on personal bank accounts.
- There’s now the option to ‘top up’ your Bounce Back Loan. This is applicable to businesses that haven’t already borrowed the maximum amount permitted under the scheme (ie, 25% of total turnover). You can make just one ,top up’
- No interest will be charged and no repayments will need to be made in the first 12 months.
- After 12 months, all banks will charge a fixed 2.5% annual interest.
- You can repay the loan early without penalty or with some banks you can part-repay or overpay.
- The loans can now last for 10 years i.e. a year interest-free and the rest at 2.5%. However, you can repay at any time without paying a fee, providing flexibility – and the sooner you repay once interest is charged, the smaller the overall cost.
- Payment holiday and/or interest-only periods of up to six months. This includes the option to:
- Move to interest-only payments temporarily up to three times, with each interest-only period lasting up to six months, and/or
- Take one payment holiday over the length of the loan, pausing repayments for up to six months. This option can only be used once you’ve made at least six payments (whether capital and interest or interest only).
- Your business must have been established before 1 March 2020. It must also still be trading as a going concern at the point of application (temporary cessation due to coronavirus doesn’t matter) – and the reason for any issues must be due to coronavirus.
- Credit ratings (business or personal) won’t affect your eligibility. You don’t need to prove the viability of your business.
- The loan will likely go on your business credit report, but not on your personal one (though banks may do ‘soft’ credit checks on both).
- Bounce back loans DON’T affect your eligibility for other Government personal support i.e. you can still apply for a bounce back loan and get the SEISS support grants.
If you’d like to discuss funding options for your business please get in touch with us and we will be happy to help you.