What the Bounce Back Loan Scheme and ‘pay as you grow’ means for small businesses, who can access it, and what’s available.

The government-backed loan offers financial support to small businesses and sole traders impacted by coronavirus COVID-19.

The scheme was announced to ensure that small businesses can access the cash they need, and quickly. In doing so, they may have a better chance to continue operating during the coronavirus pandemic.

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

How much can I borrow through the Bounce Back Loan Scheme?

Small businesses will be able to take out a government guaranteed loan, borrowing between £2,000 and £50,000.

When can I access the Small Business Bounce Back Loan Scheme?

The scheme has been available online since 4th May 2020. The Chancellor’s Winter Economy Plan extends the application window until 30th November 2020.

As with the CBILS, borrowing is available from approved lenders.

What sort of borrowing terms are available for bounce back loans?

Sunak announced that the government were working with lenders to agree a low level of interest during the repayment period. The Winter Economy Plan also saw the repayment period increased from 6 to 10 years. This is part of the government’s pay as you grow promise, giving businesses more time to pay if needed.

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 loan under the Bounce Back Loan Scheme?

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

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.