May 11th, 2020

Business Bounce Back Loan- How does it work?

Bounce Back Loan Scheme (BBLS)

It really is as the name suggests a scheme which has been launched for small businesses who are struggling to access coronavirus funding quickly enough.

This may be a vital lifeline for some businesses which have fallen through the net with the other coronavirus funding schemes.

So How does it work?

Who is eligible?

You can apply for a loan if your business:

If your business was classed as a business in difficulty on 31 December 2019 you’ll need to confirm that you’re complying with additional state aid restrictions.

Businesses from any sector can apply, except:

Can I apply for the BBLS and the other Coronavirus Loan Schemes?

If you’ve already received a loan of up to £50,000 under any of the following:

you can transfer it into the Bounce Back Loan scheme. You have until 4 November 2020 to arrange this with your lender.

You cannot apply for the BBLS if you are already claiming under any of the above, it is one or the other.

How to apply?

To apply, you’ll need to contact a participating bank directly and fill in a short online questionnaire.  All banks are charging the same 2.5% annual interest. (after the first initial 12 months at 0%)

You will need some details to hand when filling in your application.  You’ll need details of your annual turnover, account number, the amount you wish to borrow, a copy of your tax return and you also to confirm that your business has been adversely impacted by coronavirus.

 

The key thing to remember is that these loans are exactly that, they are loans and do need to be paid back.  They are not grants like the furlough scheme or Self-Employment Income Support grants.  All businesses that take out a bounce back loan are responsible for repaying any facility they may take out. No business will be required to make a repayment during the first 12 months of the loan, giving them time to get back on their feet.

As it is a loan it is likely to go on your business credit report.

It is vital to maintain cash-flow forecasts to ensure you know the cash position of your business now, and for at least the next 12 weeks.  Ideally, we would recommend 12 months.

If you would like to discuss how to keep your business accounts up to date and reviewing cash positions please do get in touch.

 

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by
Director

Alison obtained a First class degree in Accountancy and Management at UCLAN University. She then went on to qualify as a certified accountant in 2006 and became a founder member in 2011.

Alison trained at a practice in Liverpool and, within her 10 years there, she developed as an accounts manager and obtained a varied portfolio of clients which has provided her with a range of experience in accounts, audit, VAT and taxation.
Alison specialises in giving sound jargon-free advice to a range of small and medium sized businesses.

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