28 Apr 2020
New 'bounce back' loans offered to SMEs
The UK Government has announced a new guaranteed loan scheme for small and medium-sized businesses.
The Bounce Back Loan scheme will help firms to borrow between £2,000 and £50,000.
The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.
Loan terms will be up to 6 years and no repayments will be due during the first 12 months.
The government has said it will work with lenders to agree a low rate of interest for the remaining period of the loan.
The scheme will be delivered through a network of accredited lenders.
Eligibility
You can apply for a loan if your business:
- is based in the UK;
- has been negatively affected by coronavirus; and
- was not an ‘undertaking in difficulty’ on 31 December 2019
Who cannot apply
The following businesses are not eligible to apply:
- banks, insurers and reinsurers (but not insurance brokers)
- public-sector bodies
- further-education establishments, if they are grant-funded
- state-funded primary and secondary schools
The government has also said that you cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).
If you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.
How to apply
The Bounce Back Loan scheme will launch on 4 May 2020. More information about the scheme will be published shortly.
In the meantime, Aberdein Considine’s Corporate & Business Advisory team can offer support in a number of ways, from helping you understand the scheme in more detail and keeping you updated as more details are announced.
We work with clients across a variety of industries and business sectors to provide a complete legal and business advisory service.