Earlier today the government released the final details of the new Bounce Back Loan Scheme (BBLS). Businesses can apply for £2,000 to £50,000 and will be able to access the cash in days.
The loans will be 100% backed by the government as opposed to the Coronavirus Business Interruption Loan Scheme (CBILS) that were only 80% supported.
The maximum amount you can borrow is 25% of you annual turnover and your business must have been setup before the 1st of March, 2020.
You will be eligible if your business is UK based and has been affected by the coronavirus. The loan is unsecured which means the government acts as the guarantor for the money rather than you personally.
Application will be via a short online form and the money should be in the bank account of the business with in days. Credit ratings will not impact your eligibility though during the application process there will be a simple test.
Loans will be up to 6 year with no payments due for the first year and there will be no penalty if you want to pay the loan back before the end of the loan period.
In the first year the interest charged on the loan will be 0% and then 2.5% APR for the remaining 5 years. This is much cheaper than any commercial loans out there and only .5% over the figure normally used for inflation (2%).
As long as you responsible with money it’s hard to see the downside of the scheme. Obviously it’s a loan and as such needs paying back but you could use to pay down more expensive debt or invest it assets that earn you more income. With no penalty for paying the loan back early if you didn’t use it and paid it back within the first year, from what i can see it would not cost you a penny in interest.
Hopefully you are with one of the banks below and not the Coop Bank like me. While the banking with the Coop is free due to being a member of the FSB, it’s like a dinosaur when it comes to technology and they are lagging behind with their online application.