Coronavirus COVID-19 Update: It's business as usual for us 🙂. Click here to view our support centre.

x

What does the new Small Business Bounce Back Loan actually mean for small businesses, who can access it, and how?

On Monday 27th April, Chancellor Rishi Sunak announced a new government-backed loan to support small businesses and sole traders who are struggling financially as a result of coronavirus COVID-19.

The scheme was announced to ensure that small businesses can access the cash they need quickly, in order to continue operating during the coronavirus pandemic.

In response to the announced Business Bounce Back Loan scheme, Director-General for the Confederation of British Industry, Dame Carolyn Fairbairn, described it as “transformational”.

“Sole traders, micro-firms and entrepreneurs will now have a simple route to fast finance to stay afloat, without red tape or time-consuming checks.”

The government already operate a scheme to guarantee 80% of loan amounts made through the Coronavirus Business Interruption Loan Scheme (CBILS). Under the Bounce Back Loan Scheme, 100% of the amount borrowed is guaranteed.

How much can I borrow under the new Small Business Bounce Back Loan?

Small businesses will be able to take out one of the new government-backed loans, borrowing between £2,000 and £50,000.

How quickly will I be able to access the Small Business Bounce Back Loan?

The government have confirmed that applications for the Bounce Back Loan will open online from 4th May 2020. As with the CBILS, borrowing will be available from approved lenders.

The government have assured anxious businesses that they are working alongside lenders to make sure that the scheme is delivered as quickly as possible, with funds available in just days.

What sort of borrowing terms are available under the Business Bounce Back Loan?

Sunak announced that the government were working with lenders to agree a low level of interest during the repayment period.

In addition to guaranteeing 100% of the loan, the government will pay any fees or interest in the first 12 months.

How do I apply for a Small Business Bounce Back Loan?

Businesses will be able to apply for a loan under the scheme through a short, standardised online application, available from various approved lenders.

Unlike CBILS, lenders will not be capped on the amount they can offer under the government guarantee. Crucially, business applications will also be assessed on their viability before coronavirus COVID-19, to make the scheme more accessible.

Does the Small Business Bounce Back Loan replace the Coronavirus Business Interruption Loan Scheme (CBILS)?

No – Sunak confirmed that the new lending scheme will run alongside the existing CBILS, and the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

Visit our Coronavirus business information centre, or learn more about how our online accounting services are supporting self-employed workers and small businesses. You might also be interested in reading more about why submitting your Self Assessment tax return early might help you financially. 

About The Author

Elizabeth Hughes

An SEO Copywriter and Content Creator. After more than ten years of enjoying myself by turning difficult subjects into elegant, simple language, I still can't believe I get paid for this.

Leave a Reply

Please Login to comment

Read more posts...

What is a Letter of Intent When Selling a Business?

If you are currently looking into selling your business, or purchasing one from someone else, you may have come across the term…

Read More

Staff Spotlight: Sarah Geoghegan

In the Staff Spotlight this month, we have Sarah! What is your job title? Accounts Semi Senior Give an overview of the…

Read More

May 2020 Client of the Month: Baby Sensory St Albans and Harpenden

This month we talk to Laura about her business, and overcoming the challenges of operating during a global health crisis. What’s your…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure